1

FIRST REPORT

SECOND ADMISTRATIVE REFORMS COMMISSION

SECOND ADMISTRATIVE REFORMS COMMISSION

RIGHT TO INFORMATION
Master Key to Good Governance

Second Administrative Reforms Commission

Government of India

2nd Floor, Vigyan Bhawan Annexe, Maulana Azad Road, New Delhi 110 011
e-mail : arcommission@nic.in website : http://arc.gov.in JUNE 2006
 9 CONCLUSION SUMMARY OF RECOMMENDATIONS: 10
9.1 The Right to Information law of 2005 signals a radical shift in our governance culture 1. The Official Secrets Act (Para 2.2.12) :
and permanently impacts all agencies of state. The effective implementation of this law a. The Official Secrets Act, 1923 should be repealed, and substituted by a
depends on three fundamental shifts: from the prevailing culture of secrecy to a new culture chapter in the National Security Act, containing provisions relating to
of openness; from personalized despotism to authority coupled with accountability; and official secrets.
from unilateral decision making to participative governance. Obviously one single law cannot
change everything. But this fine legislation is an important beginning. Its effective application b. The equivalent of the existing Section 5, in the new law may be on the lines
depends largely on the institutions created, early traditions and practices, attendant changes recommended by the Shourie Committee as quoted below.
in laws and procedures, and adequate participation of people and the public servants. The “ 5(1) If any person, having in his possession or control any official
Commission, therefore, focused on two broad categories of issues: secret which has come into his possession or control by virtue of:-

9.2 The first set of issues relates to changes in other laws and practices involving state b1. his holding or having held an office with or under government,
secrets, civil service conduct rules and classification of documents. The Commission firmly or
believes that the Official Secrets Act, 1923 in the current form is antiquated and unsuitable b2. a contract with the government, or
to emerging needs. The second set of issues relates to implementation of the RTI Act itself,
b3. it being entrusted to him in confidence by another person
in particular process engineering, record keeping, disclosures, access and monitoring. In
holding or having held an office under or with the government,
respect of the second category of issues, the Commission’s recommendations are largely
or in any other manner,
within the framework of the present law.
i. communicates, without due authority such official secret
9.3 It is well recognized that right to information is necessary, but not sufficient, to improve to another person or uses it for a purpose other than a
governance. A lot more needs to be done to usher in accountability in governance, including purpose for which he is permitted to use it under any
protection of whistle blowers, decentralization of power and fusion of authority with law for the time being in force; or
accountability at all levels. Nevertheless, this law provides us a priceless opportunity to
ii. fails to take reasonable care of, or so conducts himself
redesign the processes of governance, particularly at the grass roots level where the citizens’
as to endanger the safety of the official secret; or
interface is maximum. Now that the romance of the struggle for transparency is over, the
tedious process of system-building has to take over. It is in this spirit that the Commission iii. wilfully fails to return the official secret when it is his
made specific recommendations and attempted to provide a road map for their time-bound duty to return it,
implementation. shall be guilty of an offence under this section.
5(2) Any person voluntarily receiving any official secret knowing
or having reasonable ground to believe, at the time he receives it,
that the official secret is communicated in contravention of this Act,
he shall be guilty of an offence under this section.
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 9 CONCLUSION SUMMARY OF RECOMMENDATIONS: 10
9.1 The Right to Information law of 2005 signals a radical shift in our governance culture 1. The Official Secrets Act (Para 2.2.12) :
and permanently impacts all agencies of state. The effective implementation of this law a. The Official Secrets Act, 1923 should be repealed, and substituted by a
depends on three fundamental shifts: from the prevailing culture of secrecy to a new culture chapter in the National Security Act, containing provisions relating to
of openness; from personalized despotism to authority coupled with accountability; and official secrets.
from unilateral decision making to participative governance. Obviously one single law cannot
change everything. But this fine legislation is an important beginning. Its effective application b. The equivalent of the existing Section 5, in the new law may be on the lines
depends largely on the institutions created, early traditions and practices, attendant changes recommended by the Shourie Committee as quoted below.
in laws and procedures, and adequate participation of people and the public servants. The “ 5(1) If any person, having in his possession or control any official
Commission, therefore, focused on two broad categories of issues: secret which has come into his possession or control by virtue of:-

9.2 The first set of issues relates to changes in other laws and practices involving state b1. his holding or having held an office with or under government,
secrets, civil service conduct rules and classification of documents. The Commission firmly or
believes that the Official Secrets Act, 1923 in the current form is antiquated and unsuitable b2. a contract with the government, or
to emerging needs. The second set of issues relates to implementation of the RTI Act itself,
b3. it being entrusted to him in confidence by another person
in particular process engineering, record keeping, disclosures, access and monitoring. In
holding or having held an office under or with the government,
respect of the second category of issues, the Commission’s recommendations are largely
or in any other manner,
within the framework of the present law.
i. communicates, without due authority such official secret
9.3 It is well recognized that right to information is necessary, but not sufficient, to improve to another person or uses it for a purpose other than a
governance. A lot more needs to be done to usher in accountability in governance, including purpose for which he is permitted to use it under any
protection of whistle blowers, decentralization of power and fusion of authority with law for the time being in force; or
accountability at all levels. Nevertheless, this law provides us a priceless opportunity to
ii. fails to take reasonable care of, or so conducts himself
redesign the processes of governance, particularly at the grass roots level where the citizens’
as to endanger the safety of the official secret; or
interface is maximum. Now that the romance of the struggle for transparency is over, the
tedious process of system-building has to take over. It is in this spirit that the Commission iii. wilfully fails to return the official secret when it is his
made specific recommendations and attempted to provide a road map for their time-bound duty to return it,
implementation. shall be guilty of an offence under this section.
5(2) Any person voluntarily receiving any official secret knowing
or having reasonable ground to believe, at the time he receives it,
that the official secret is communicated in contravention of this Act,
he shall be guilty of an offence under this section.
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 Right to Information – Master Key to Good Governance Summary of Recommendations

5(3) A person guilty of an offence under this section shall be Section 124 of the Indian Evidence Act will become redundant on
punishable with imprisonment for a term which may extend to account of the above and will have to be repealed.
three years or with fine or with both. Accordingly, the following will have to be inserted at the appropriate
Explanation: For the purpose of this section, ‘Official Secret’ means place in the Code of Civil Procedure, 1908 and the Code of Criminal
any information the disclosure of which is likely to prejudicially Procedure, 1973:
affect the sovereignty and integrity of India, the security of State, “Any person aggrieved by the decision of any Court subordinate to the High Court
friendly relations with foreign states, economic, commercial, rejecting a claim for privilege made under section 123 of the Indian Evidence Act,
scientific and technological matters relating to national security and 1872 shall have a right to appeal to the High Court against such decision, and such
includes: any secret code, password, sketch plan, model, article, appeal may be filed notwithstanding the fact that the proceeding in which the decision
note or document in relation to a prohibited place.” was pronounced by the Court is still pending.”
2. Governmental Privilege in Evidence (Para 2.3.8) : 3. The Oath of Secrecy (Para 2.4.4):
a. Section 123 of the Indian Evidence Act, 1872 should be amended to read a. As an affirmation of the importance of transparency in public affairs,
as follows: Ministers on assumption of office may take an oath of transparency
“123.(1)Subject to the provisions of this section, no one shall be permitted to alongwith the oath of office and the requirement of administering the
give any evidence derived from official records which are exempt from public oath of secrecy should be dispensed with. Articles 75(4) and 164 (3), and
disclosure under the RTI Act, 2005. the Third Schedule should be suitably amended.
(2) Where he withholds su ch permission, he shall make an affidavit b. Safeguard against disclosure of information against the national interest
containing a statement to that effect and setting forth his reasons therefor. may be provided through written undertaking by incorporation of a clause
(3) Where such officer has withheld permission for the giving of such evidence, in the national security law dealing with official secrets.
the Court, after considering the affidavit or further affidavit, and if it 4. Exempted organizations (Para 2.5.6) :
so thinks fit, after examining such officer or, in appropriate cases, the
Minister, orally: a. The Armed Forces should be included in the Second Schedule of the Act.

a) shall issue a summons for the production of the unpublished official b. The Second Schedule of the Act may be reviewed periodically.
records concerned, if such summons has not already been issued c. All organizations listed in the Second Schedule have to appoint PIOs.
b) shall inspect the records in chambers; and Appeals against orders of PIOs should lie with CIC/SICs.
(This provision can be made by way of removal of difficulties under section
c) shall determine the question whether the giving of such evidence 30)
would or would not be injurious to public interest, recording its
reasons therefor. 5. The Central Civil Services (Conduct) Rules (Para 3.1.4) :
(4) Where, under sub-section (3), the Court decides that the giving of such a. Civil Services Rules of all States may be reworded on the following lines:
evidence would not be injurious to public interest, the provisions of sub-
“Communication of Official Information:
section (1) shall not apply to such evidence.
Every Government servant shall, in performance of his duties in good faith,
Provided that in respect of information classified as Top Secret for reasons
communicate to a member of public or any organisation full and accurate information,
of national security, only the High Court shall have the power to order
which can be disclosed under the Right to Information Act, 2005.
production of the records.”
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 Right to Information – Master Key to Good Governance Summary of Recommendations

Explanation – Nothing in this rule shall be construed as permitting communication

Sl.No. Section of the RTI Act to which Classification
of classified information in an unauthorised manner or for improper gains to a
information pertains
Government servant or others.”
1 8(1)(a) Top Secret
6. The Manual of Office Procedure (Para 3.2.3) :
2 8(1)(b) Confidential
a. Para 116 of the Manual of Office Procedure needs to be reworded as
3 8(1)(c) Confidential
follows:.
4 8(1)(d) Secret
“Communication of Official Information: Every Government Servant shall,
in performance of his duties in good faith, communicate to a member of public 5 8(1)(e) Confidential
or any organization full and accurate information, which can be disclosed 6 8(1)(f) Secret
under the Right to Information Act. (Nothing stated above shall be construed
as permitting communication of classified information in an unauthorized 7 8(1)(g) Top Secret/Secret
manner or for improper gains to a Government Servant or others).” 8 8(1)(h) Secret/Confidential
b. Para 118 (1) should be deleted. 9 8(1)(i) Confidential
c. The State Governments may be advised to carry out similar amendments 10 8(1)(j) Confidential/restricted
in their Manuals, if such provisions exist therein.
11 9 Confidential/restricted
7. Classification of Information (Para 4.1.8) :
a. The GOI should amend the Manual of Departmental Security Instructions Explanation: The above mentioned classification should be generally
in the following manner: followed. It is quite possible that information may be covered by more
than one exemption; in that case the information should be given the
i. Information Deserving Classification (Para 3) classification of the higher category. Also if it is felt by the competent
It would be advisable for each Ministry/Department to identify the authority that circumstances of a case demand a higher classification than
information which deserves to be given a security classification. what is indicated above, then the same may be done by an authority,
Ordinarily, only such information should be given a security which is empowered to give such a classification.
classification which would qualify for exemption from disclosure
under the Right to Information Act, 2005. The Classification of Provision should be made to include annual confidential reports of officers
documents should be done as per the following guidelines. and examination question papers and related matters in the exemptions
under the RTI Act. This may be done by way of removal of difficulties
under Section 30.

ii. Upgrading and Downgrading (Para 2.3)

Documents once classified as “Top Secret” or “Secret”, should
remain so classified as long as required but not exceeding 30 years.
Documents classified as confidential and restricted should remain
so for a period not exceeding 10 years. However, the competent
classifying officer may, for reasons to be recorded in writing,

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authorise continued classification beyond the period prescribed 9. Designating Information Officers and Appellate Authorities (Para 5.3.4) :
above if information, the disclosure of which would cause damage (i) All Ministries/ Departments/Agencies/Offices with more than one PIO
to national security or national interest. A recipient officer of have to designate a nodal Assistant Public Information Officer with the
appropriate rank in a Ministry or Department may upgrade the authority to receive requests for information on behalf of all PIOs. Such
security classification of a document received from outside, but a provision should be incorporated in the Rules by appropriate
this raised classification will be limited only to the Ministry or governments.
Department. (S)He will, however, have no authority to downgrade
the security classification of a document received, without the (ii) PIOs in Central Secretariats should be of the level of atleast Deputy
concurrence of the originator. Within the same Department, an Secretary /Director. In State Secretariats officers of similar rank should
officer superior to the originator would have the authority to be notified as PIOs. In all subordinate agencies and departments officers
downgrade or upgrade the classification. sufficiently senior in rank and yet accessible to public may be designated
as PIOs.
iii. Officer Authorised to Accord the Grading:
(iii) All public authorities may be advised by the Government of India that
Top Secret Not below Joint Secretary alongwith the Public Information Officers they should also designate
Secret Not below Deputy Secretary the appellate authority and publish both, together.
Confidential Not below Under Secretary (iv) The designation and notification of Appellate Authorities for each public
The State Governments may authorise officers of equivalent rank to authority may be made either under Rules or by invoking Section 30 of
accord the grading. the Act.

8. Building Institutions (Para 5.2.5): 10. Organising Information and Recordkeeping (Para 5.4.11):

a. Section 12 of the Act may be amended to constitute the Selection a. Suo motu disclosures should also be available in the form of printed,
Committee of CIC with the Prime Minister, Leader of the Opposition priced publication in the official language, revised periodically (at least
and the Chief Justice of India. Section 15 may be similarly amended to once a year). Such a publication should be available for reference, free of
constitute the Selection Committee at the State level with the Chief charge. In respect of electronic disclosures, NIC should provide a single
Minister, Leader of the Opposition and the Chief Justice of the High portal through which disclosures of all public authorities under
Court. appropriate governments could be accessed, to facilitate easy availability
of information.
b. The GOI should ensure the constitution of SICs in all States within 3
months. b. Public Records Offices should be established as an independent authority
in GOI and all States within 6 months by integrating and restructuring
c. The CIC should establish 4 regional offices of CIC with a Commissioner the multiple agencies currently involved in record keeping. This Office
heading each. Similarly regional offices of SICs should be established in will be a repository of technical and professional expertise in management
larger States. of public records. It will be responsible for supervision, monitoring,
d. At least half of the members of the Information Commissions should be control and inspection of record keeping in all public offices.
drawn from non civil services background. Such a provision may be c. Public Records Office would function under the overall supervision and
made in the Rules under the Act, by the Union Government, applicable guidance of CIC/SIC.
to both CIC and SICs.

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d. As a one time measure, GOI should earmark 1% of the funds of all e. The CIC and the SICs may issue guidelines for the benefit of public
Flagship Programmes for a period of five years for updating records, authorities and public officials in particular and public in general about
improving infrastructure, creating manuals and establishing the Public key concepts in the Act and approach to be taken in response to
Records Offices. (An amount not exceeding 25% of this should be utilized information requests on the lines of the Awareness Guidance Series
for awareness generation.) referred to above (para 5.5.1).
e. As a one time measure, GOI may create a Land Records Modernisation 12. Monitoring Mechanism (Para 5.6.4):
Fund for survey and updation of all land records. The quantum of
assistance for each State would be based on an assessment of the field a. The CIC and the SICs may be entrusted with the task of monitoring
situation. effective implementation of Right to Information Act in all public
authorities. (An appropriate provision could be made under Section 30
f. All organizations, which have jurisdiction over an area equal to or by way of removal of difficulties).
exceeding a district, should be funded and required to complete the
process of digitization by the end of 2009. All sub-district level b. As a large number of Public Authorities exist at regional, state, district
organizations should complete this task by the end of 2011. The and sub district level, a nodal officer should be identified wherever
controlling Ministries/Departments at Union and State level should lay necessary by the appropriate monitoring authority (CIC/SIC) to monitor
down a detailed road map for this purpose with well-defined milestones implementation of the Act.
within 6 months, so that this could be implemented as a priority item in c. Each public authority should be responsible for compliance of provisions
the Eleventh Five Year Plan. of the Act in its own office as well as that of the subordinate public
authorities.
11. Capacity Building and Awareness Generation (Para 5.5.5.):
d. A National Coordination Committee (NCC) may be set up under the
a. Training programmes should not be confined to merely PIOs and APIOs. chairpersonship of the Chief Information Commissioner with the nodal
All government functionaries should be imparted atleast one day training Union Ministry, the SICs and representatives of States as members. A
on Right to Information within a year. These training programmes have provision to this effect may be made under Section 30 of the Act by way
to be organized in a decentralized manner in every block. A cascading of removing difficulties. The National Coordination Committee would:
model could be adopted with a batch of master trainers in each district.
b. In all general or specialized training programmes, of more than 3 days i. serve as a national platform for effective implementation of the
duration, a half-day module on Right to Information should be Act,
compulsory. ii. document and disseminate best practices in India and elsewhere,
c. Awareness campaigns should be entrusted to credible non profit iii. monitor the creation and functioning of the national portal for Right
organizations at the State level. They should design a multi media to Information,
campaign best suited to the needs, in the local language. The funds
earmarked (as mentioned in para 5.4.11.d) could be utilized for this iv. review the Rules and Executive orders issued by the appropriate
purpose. governments under the Act,

d. Appropriate governments should bring out guides and comprehensible v. carry out impact evaluation of the implementation of the Act and
information material within the prescribed time. vi. perform such other relevant functions as may be deemed necessary.

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13. Facilitating Access (Para 6.2.7): the last level is reached. All these details should be made available on the
websites of the respective public authorities, in a hierarchical form.
a. In addition to the existing modes of payment, appropriate governments
should amend the Rules to include payment through postal orders. d. A similar system should also be adopted by the States.
b. States may be required to frame Rules regarding application fee which 15. Single Window Agency at District Level (Para 6.4.2):
are in harmony with the Central Rules. It needs to be ensured that the
fee itself does not become a disincentive. a. A Single Window Agency should be set up in each District. This could be
achieved by creating a cell in a district-level office, and designating an
c. Appropriate governments may restructure the fees (including additional officer as the Assistant Public Information Officer for all public
fees) in multiples of Rs 5. {e.g. instead of prescribing a fee of Rs. 2 per authorities served by the Single Window Agency. The office of the District
additional page it may be desirable to have a fee of Rs. 5 for every 3 pages Collector/Deputy Commissioner, or the Zilla Parishad is well suited for
or part thereof}. location of the cell. This should be completed by all States within
d. State Governments may issue appropriate stamps in suitable 6 months.
denominations as a mode of payment of fees. Such stamps would be used
for making applications before public authorities coming within the 16. Subordinate Field Offices and Public Authorities (Para 6.5.4):
purview of State Governments. a. The lowest office in any organization which has decision making power
e. As all the post offices in the country have already been authorized to or is a custodian of records should be recognized as a public authority.
function as APIOs on behalf of Union Ministries/Departments, they may 17. Application to Non Governmental Bodies (Para 6.6.6):
also be authorized to collect the fees in cash and forward a receipt along
a. Organisations which perform functions of a public nature that are
with the application.
ordinarily performed by government or its agencies, and those which
14. Inventory of Public Authorities (Para 6.3.2): enjoy natural monopoly may be brought within the purview of the Act.

a. At the Government of India level the Department of Personnel and b. Norms should be laid down that any institution or body that has received
Training has been identified as the nodal department for implementation 50% of its annual operating costs, or a sum equal to or greater than Rs.1
of the RTI Act. This nodal department should have a complete list of all crore during any of the preceding 3 years should be understood to have
Union Ministries/Departments which function as public authorities. obtained ‘substantial funding’ from the government for the period and
purpose of such funding.
b. Each Union Ministry/Department should also have an exhaustive list of
all public authorities, which come within its purview. The public c. Any information which, if it were held by the government, would be
authorities coming under each ministry/ department should be classified subject to disclosure under the law, must remain subject to such disclosure
into (i) constitutional bodies, (ii) line agencies, (iii) statutory bodies, (iv) even when it is transferred to a non-government body or institution.
public sector undertakings, (v) bodies created under executive orders, d. This could be achieved by way of removal of difficulties under section 30
(vi) bodies owned, controlled or substantially financed, and (vii) NGOs of the Act.
substantially financed by government. Within each category an up-to-
date list of all public authorities has to be maintained. 18. Time Limit for Information Beyond 20 Years (Para 6.7.6):
c. Each public authority should have the details of all public authorities a. The stipulation of making available 20-year old records on request should
subordinate to it at the immediately next level. This should continue till be applicable only to those public records which need to be preserved
for such a period. In respect of all other records, the period of availability

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 Right to Iinformation – Master Key to Good Governance Summary of Recommendations

will be limited to the period for which they should be preserved under This may be accomplished by way of removal of difficulties or framing of
the record keeping procedures. appropriate Rules.
b. If any public authority intends to reduce the period upto which any 21. Application of the Act to the Legislature and the Judiciary (Para 7.11):
category of record is to be kept, it shall do so after taking concurrence of
the Public Records Office as suggested in para 5.4.11. a. A system of indexing and cataloguing of records of the legislatures, which
facilitates easy access should be put in place. This could be best achieved
c. These recommendations could be implemented by way of removal of by digitising all the records and providing access to citizens with facilities
difficulties under Section 30 of the Act. for retrieving records based on intelligible searches.
19. Mechanism for Redressal of Public Grievances (Para 6.8.3): b. A tracking mechanism needs to be developed so that the action taken by
a. States may be advised to set up independent public grievances redressal the executive branch on various reports like CAG, Commissions of Enquiry
authorities to deal with complaints of delay, harassment or corruption. and House Committees is available to legislators and public, online.
These authorities should work in close coordination with the SICs/District c. The working of the legislative committees should be thrown open to the
Single Window Agencies, and help citizens use information as a tool to public. The presiding officer of the committee, if required in the interest
fight against corruption and misgovernance, or for better services. of State or privacy, may hold proceedings in camera.

20. Frivolous and Vexatious Requests (Para 6.9.5): d. The records at the district court and the subordinate courts should be
stored in a scientific way, by adopting uniform norms for indexing and
a. Section 7 may be amended to insert sub section (10) as follows: cataloguing.
“The PIO may refuse a request for information if the request is manifestly e. The administrative processes in the district and the subordinate courts
frivolous or vexatious. should be computerized in a time bound manner. These processes should
Provided that such a refusal shall be communicated within 15 days of receipt be totally in the public domain.
of application, with the prior approval of the appellate authority.
Provided further that all such refusals shall stand transferred to CIC/SIC, as
the case may be and the CIC/SIC shall dispose the case as if it is an appeal
under section 19(3) of the RTI Act”.
b. It may be provided that information can be denied if the work involved
in processing the request would substantially and unreasonably divert
the resources of the public body.
Provided that such a refusal shall be communicated within 15 days of
receipt of application, with the prior approval of the appellate authority.
Provided further that all such refusals shall stand transferred to CIC/
SIC, as the case may be and the CIC/SIC shall dispose the case as if it is an
appeal under section 19(3) of the RTI Act.

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 FOURTH REPORT

SECOND ADMINISTRATIVE REFORMS COMMISSION

“You must be the change

Second Administrative Reforms Commission
Government of India
you wish to see in the world. ”
Mahatma Gandhi
2nd Floor, Vigyan Bhawan Annexe, Maulana Azad Road, New Delhi 110 011
e-mail : arcommission@nic.in website : http://arc.gov.in JANUARY 2007
 CONCLUSION SUMMARY OF RECOMMENDATIONS

1. (2.1.3.1.6) Reform of Political Funding

This report must end on a note of optimism. Indians have always valued a world beyond the
material and have embraced spiritualism as a way of life. Instances abound in our epics of a. A system for partial state funding should be introduced in order to reduce
good behaviour, of the triumph of good over evil, of the wisdom of sages. Stories of the the scope of illegitimate and unnecessary funding of expenditure for
honesty, generosity and piety of legendry kings such as Vikramaditya, are told to our children elections.
even today. There is no reason why Ram Rajya cannot be attempted.
2. (2.1.3.2.4) Tightening of Anti-Defection Law
In modern India, poverty, insufficiency and class conflicts are slowly giving way to a confident,
inclusive, empowered India. On the Transparency International’s Corruption Index, India’s a. The issue of disqualification of members on grounds of defection should
position has improved significantly, and hopefully will continue to do so. The vigilance of be decided by the President/Governor on the advice of the Election
our enlightened people will ensure this. Commission.

3. (2.1.3.3.2) Disqualification
The Commission believes that this Report on Ethics in Governance is among the most
important that this Commission has been called upon to write, because increased honesty in a. Section 8 of the Representation of the People Act, 1951 needs to be
governance would have a major impact on the everyday lives of the people of India. When amended to disqualify all persons facing charges related to grave and
the recommendations in this report are implemented, greater efficiency in government work heinous offences and corruption, with the modification suggested by the
and accountability would be achieved, because more public servants would work not with a Election Commission.
private agenda but for the larger public good. Equally importantly, a more corruption free
regime would lead to a much higher rate of growth of our GDP, bring an overall improvement 4. (2.1.4.3) Coalition and Ethics
in the economy and lead to greater transparency in government actions in serving its people.
a. The Constitution should be amended to ensure that if one or more parties
All this, in turn, will lead to greater empowerment of the people – the core need of a vibrant
in a coalition with a common programme mandated by the electorate
democracy.
either explicitly before the elections or implicitly while forming the
government, realign midstream with one or more parties outside the
coalition, then Members of that party or parties shall have to seek a fresh
mandate from the electorate.

5. (2.1.5.4) Appointment of the Chief Election Commissioner/Commissioners

a. A collegium headed by the Prime Minister with the Speaker of the Lok
Sabha, the Leader of Opposition in the Lok Sabha, the Law Minister and
the Deputy Chairman of the Rajya Sabha as members; should make

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 Ethics in Governance Summary of Recommendations

recommendations for the consideration of the President for appointment *d. An annual report with regard to the observance of these Codes should be
of the Chief Election Commissioner and the Election Commissioners. submitted to the appropriate legislature. This report should include
specific cases of violations, if any, and the action taken thereon.
6. (2.1.6.3) Expediting Disposal of Election Petitions
*e. The Code of Ethics should inter alia include broad principles of the
a. Special Election Tribunals should be constituted at the regional level under
Minister-civil servant relationship and the Code of Conduct should
Article 323B of the Constitution to ensure speedy disposal of election
stipulate the details as illustrated in para 2.4.3.
petitions and disputes within a stipulated period of six months. Each
Tribunal should comprise a High Court Judge and a senior civil servant *f. The Code of Ethics, the Code of Conduct and the annual report should
with at least 5 years of experience in the conduct of elections (not below be put in the public domain.
the rank of an Additional Secretary to Government of India/Principal
secretary of a State Government). Its mandate should be to ensure that 9. (2.5.7.6) Enforcement of ethical norms in Legislatures
all election petitions are decided within a period of six months as provided
*a. An Office of ‘Ethics Commissioner’ may be constituted by each House of
by law. The Tribunals should normally be set up for a term of one year
Parliament. This Office, functioning under the Speaker/Chairman, would
only, extendable for a period of 6 months in exceptional circumstances.
assist the Committee on Ethics in the discharge of its functions, and advise
7. (2.1.7.3) Grounds of Disqualification for Membership Members, when required, and maintain necessary records.

a. Appropriate legislation may be enacted under Article 102(e) of the *b. In respect of states, the Commission recommends the following:
Constitution spelling out the conditions for disqualification of
(i) All State legislatures may adopt a Code of Ethics and a Code of
Membership of Parliament in an exhaustive manner. Similarly, the States
Conduct for their Members.
may also legislate under Article 198(e).
(ii) Ethics Committees may be constituted with well defined procedures
8. (2.4.5) Ethical Framework for Ministers
for sanctions in case of transgressions, to ensure the ethical conduct
*a. In addition to the existing Code of Conduct for Ministers, there should of legislators.
be a Code of Ethics to provide guidance on how Ministers should uphold
(iii) ‘Registers of Members’ Interests’ may be maintained with the
the highest standards of constitutional and ethical conduct in the
declaration of interests by Members of the State legislatures.
performance of their duties.
(iv) Annual Reports providing details including transgressions may be
*b. Dedicated units should be set up in the offices of the Prime Minister and
placed on the Table of the respective Houses.
the Chief Ministers to monitor the observance of the Code of Ethics and
the Code of Conduct. The unit should also be empowered to receive public (v) An Office of ‘Ethics Commissioner’ may be constituted by each
complaints regarding violation of the Code of Conduct. House of the State legislatures. This Office would function under
the Speaker/Chairman, on the same basis as suggested for
*c. The Prime Minister or the Chief Minister should be duty bound to ensure
Parliament.
the observance of the Code of Ethics and the Code of Conduct by Ministers.
This would be applicable even in the case of coalition governments where 10. (2.6.12) Office of Profit
the Ministers may belong to different parties.
a. The Law should be amended to define office of profit based on the
following principles:

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(i) All offices in purely advisory bodies where the experience, insights not be nominated on the Boards of Public undertakings. This will,
and expertise of a legislator would be inputs in governmental policy, however, not apply to non-profit public institutions and advisory bodies.
shall not be treated as offices of profit, irrespective of the
remuneration and perks associated with such an office. 12. (2.8.5) Code of Ethics for Regulators

(ii) All offices involving executive decision making and control of public a. A comprehensive and enforceable code of conduct should be prescribed
funds, including positions on the governing boards of public for all professions with statutory backing.
undertakings and statutory and non-statutory authorities directly 13. (2.9.23) Ethical Framework for the Judiciary
deciding policy or managing institutions or authorizing or approving
expenditure shall be treated as offices of profit, and no legislator a. A National Judicial Council should be constituted, in line with universally
shall hold such offices. accepted principles where the appointment of members of the judiciary
should be by a collegium having representation of the executive, legislature
(iii) If a serving Minister, by virtue of office, is a member or head of and judiciary. The Council should have the following composition:
certain organizations like the Planning Commission, where close
coordination and integration between the Council of Ministers and • The Vice-President as Chairperson of the Council
the organization or authority or committee is vital for the day-to-
day functioning of government, it shall not be treated as office of • The Prime Minister
profit. • The Speaker of the Lok Sabha
(The use of discretionary funds at the disposal of legislators, the • The Chief Justice of India
power to determine specific projects and schemes, or select the
beneficiaries or authorize expenditure shall constitute discharge of • The Law Minister
executive functions and will invite disqualification under Articles
102 and 191, irrespective of whether or not a new office is notified • The Leader of the Opposition in the Lok Sabha
and held.) • The Leader of the Opposition in the Rajya Sabha
b. Schemes such as MPLADS and MLALADS should be abolished. In matters relating to the appointment and oversight of High Court Judges,
c. Members of Parliament and Members of State Legislatures should be the Council will also include the following members:
declared as ‘Public Authorities’ under the Right to Information Act, except • The Chief Minister of the concerned State
when they are discharging legislative functions.
• The Chief Justice of the concerned High Court
11. (2.7.12) Code of Ethics for Civil Servants
b. The National Judicial Council should be authorized to lay down the code
*a. ‘Public Service Values’ towards which all public servants should aspire, of conduct for judges, including the subordinate judiciary.
should be defined and made applicable to all tiers of Government and
parastatal organizations. Any transgression of these values should be c. The National Judicial Council should be entrusted with the task of
treated as misconduct, inviting punishment. recommending appointments of Supreme Court and High Court Judges.
It should also be entrusted the task of oversight of the judges, and should
*b. Conflict of interests should be comprehensively covered in the code of be empowered to enquire into alleged misconduct and impose minor
ethics and in the code of conduct for officers. Also, serving officials should penalties. It can also recommend removal of a judge if so warranted.
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d. Based on the recommendations of the NJC, the President should have 16. (3.2.3.2) Sanction for Prosecution
the powers to remove a Supreme Court or High Court Judge.
a. Prior sanction should not be necessary for prosecuting a public servant
e. Article 124 of the Constitution may be amended to provide for the National who has been trapped red-handed or in cases of possessing assets
Judicial Council. A similar change will have to be made to Article 217. disproportionate to the known sources of income.
Also, since the Council is to have the authority to oversee and discipline
judges, further changes will need to be made to Article 217 (Clause 4). b. The Prevention of Corruption Act should be amended to ensure that
sanctioning authorities are not summoned and instead the documents
f. A Judge of the Supreme Court should be designated as the Judicial Values can be obtained and produced before the courts by the appropriate
Commissioner. He/she should be assigned the task of enforcing the code authority.
of conduct. Similar arrangement should also be made in the High Court.
c. The Presiding Officer of a House of Legislature should be designated
14. (3.2.1.10) Defining Corruption as the sanctioning authority for MPs and MLAs respectively.
a. The following should be classified as offences under the Prevention of d. The requirement of prior sanction for prosecution now applicable to
Corruption Act: serving public servants should also apply to retired public servants for
acts performed while in service.
• Gross perversion of the Constitution and democratic institutions
amounting to wilful violation of oath of office. e. In all cases where the Government of India is empowered to grant
sanction for prosecution, this power should be delegated to an
• Abuse of authority unduly favouring or harming someone.
Empowered Committee comprising the Central Vigilance Commissioner
• Obstruction of justice. and the Departmental Secretary to Government. In case of a difference
of opinion between the two, the matter could be resolved by placing it
• Squandering public money. before the full Central Vigilance Commission. In case, sanction is
required against a Secretary to Government, then the Empowered
15. (3.2.2.7) Collusive Bribery
Committee would comprise of Cabinet Secretary and the Central
a. Section 7 of the Prevention of Corruption Act needs to be amended to Vigilance Commissioner. Similar arrangements may also be made at
provide for a special offence of ‘collusive bribery’. An Offence could be the State level. In all cases the order granting sanction for prosecution
classified as ‘collusive bribery’ if the outcome or intended outcome of the or otherwise shall be issued within two months. In case of refusal,
transaction leads to a loss to the state, public or public interest; the reasons for refusal should be placed before the respective legislature
annually.
b. In all such cases if it is established that the interest of the state or public
has suffered because of an act of a public servant, then the court shall 17. (3.2.4.3) Liability of Corrupt Public Servants to Pay Damages
presume that the public servant and the beneficiary of the decision
a. In addition to the penalty in criminal cases the law should provide that
committed an offence of ‘collusive bribery’;
public servants who cause loss to the state or citizens by their corrupt
c. The punishment for all such cases of collusive bribery should be double acts should be made liable to make good the loss caused and, in addition,
that of other cases of bribery. The law may be suitably amended in this be liable for damages. This could be done by inserting a chapter in the
regard. Prevention of Corruption Act.

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18. (3.2.5.6) Speeding up Trials under the Prevention of Corruption Act: 22. (3.6.4) Protection to Whistleblowers

a. A legal provision needs to be introduced fixing a time limit for various a. Legislation should be enacted immediately to provide protection to
stages of trial. This could be done by amendments to the CrPC. whistleblowers on the following lines proposed by the Law Commission:

b. Steps have to be taken to ensure that judges declared as Special Judges • Whistleblowers exposing false claims, fraud or corruption should
under the provisions of the Prevention of Corruption Act give primary be protected by ensuring confidentiality and anonymity, protection
attention to disposal of cases under the Act. Only if there is inadequate from victimization in career, and other administrative measures to
work under the Act, should the Special Judges be entrusted with other prevent bodily harm and harassment.
responsibilities. • The legislation should cover corporate whistle-blowers unearthing
c. It has to be ensured that the proceedings of courts trying cases under the fraud or serious damage to public interest by willful acts of omission
Prevention of Corruption Act are held on a day-to-day basis, and no or commission.
deviation is permitted. • Acts of harassment or victimization of or retaliation against, a
d. The Supreme Court and the High Courts may lay down guidelines to whistleblower should be criminal offences with substantial penalty
preclude unwarranted adjournments and avoidable delays. and sentence.

19. (3.3.7) Corruption Involving the Private Sector 23. (3.7.19) Serious Economic Offences:

a. The Prevention of Corruption Act should be suitably amended to include a. A new law on ‘Serious Economic Offences’ should be enacted.
in its purview private sector providers of public utility services. b. A Serious Economic Offence may be defined as :
b. Non-Governmental agencies, which receive substantial funding, should (i) One which involves a sum exceeding Rs 10 crores; or
be covered under the Prevention of Corruption Act. Norms should be
laid down that any institution or body that has received more than 50% (ii) is likely to give rise to widespread public concern; or
of its annual operating costs, or a sum equal to or greater than Rs 1 crore
during any of the preceding 3 years should be deemed to have obtained (iii) its investigation and prosecution are likely to require highly
‘substantial funding’ for that period and purpose of such funding. specialized knowledge of the financial market or of the behaviour
of banks or other financial institutions; or
20. (3.4.10) Confiscation of Properties Illegally Acquired by Corrupt Means.
(iv) involves significant international dimensions; or
a. The Corrupt Public Servants (Forfeiture of Property) Bill as suggested by
the Law Commission should be enacted without further delay. (v) in the investigation of which there is requirement of legal, financial,
investment and investigative skills to be brought together; or
21. (3.5.4) Prohibition of ‘Benami’1 Transactions
(vi) which appear to be complex to the Union Government, regulators,
a. Steps should be taken for immediate implementation of the Benami banks, or any financial institution.
Transactions (Prohibition) Act 1988.
c. A Serious Frauds Office (SFO) should be set up (under the new law), to
investigate and prosecute such offences. It should be attached to the
Cabinet Secretariat. This office shall have powers to investigate and

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25. (3.9.4) Immunity Enjoyed by Legislators

prosecute all such cases in Special Courts constituted for this purpose.
The SFO should be staffed by experts from diverse disciplines such as a. The Commission, while endorsing the suggestion of the National
the financial sector, capital and futures market, commodity markets, Commission to Review the Working of the Constitution, recommends
accountancy, direct and indirect taxation, forensic audit, investigation, that suitable amendments be effected to Article 105(2) of the Constitution
criminal and company law and information technology. The SFO should to provide that the immunity enjoyed by Members of Parliament does
have all powers of investigation as stated in the recommendation of the not cover corrupt acts committed by them in connection with their duties
Mitra Committee. The existing SFIO should be subsumed in this. in the House or otherwise.
d. A Serious Frauds Monitoring Committee should be constituted to oversee b. The Commission also recommends that similar amendments may be made
the investigation and prosecution of such offences. This Committee, to in Article 194(2) of the Constitution in respect of members of the state
be headed by the Cabinet Secretary, should have the Chief Vigilance legislatures.
Commissioner, Home Secretary, Finance Secretary, Secretary Banking/
Financial Sector, a Deputy Governor, RBI, Secretary, Department of 26. (3.10.24) Constitutional Protection to Civil Servants – Article 311
Company Affairs, Law Secretary, Chairman SEBI etc as members.
a. Article 311 of the Constitution should be repealed.
e. In case of involvement of any public functionary in a serious fraud, the
b. Simultaneously Article 310 of the Constitution should also be repealed.
SFO shall send a report to the Rashtriya Lokayukta and shall follow the
directions given by the Rashtriya Lokayukta (see para 4.3.15). c. Suitable legislation to provide for all necessary terms and conditions of
services should be provided under Article 309, to protect the bona fide
f. In all cases of serious frauds the Court shall presume the existence
action of public servants taken in public interest; this should be made
of mens rea of the accused, and the burden of proof regarding its
applicable to the States.
non-existence, shall lie on the accused.
d. Necessary protection to public servants against arbitrary action should
24. (3.8.5) Prior Concurrence for Registration of Cases: Section 6A of the Delhi Special
be provided through such legislation under Article 309.
Police Establishment Act, 1946
27. (4.3.15) The Lok Pal
a. Permission to take up investigations under the present statutory
arrangement should be given by the Central Vigilance Commissioner in a. The Constitution should be amended to provide for a national ombudsman
consultation with the concerned Secretary. In case of investigation against to be called the Rashtriya Lokayukta. The role and jurisdiction of the
a Secretary to Government, the permission should be given by a Committee Rashtriya Lokayukta should be defined in the Constitution while the
comprising the Cabinet Secretary and the Central Vigilance Commissioner. composition, mode of appointment and other details can be decided by
This would require an amendment to the Delhi Special Police Parliament through legislation.
Establishment Act. In the interim the powers of the Union Government
may be delegated to the Central Vigilance Commissioner, to be exercised b. The jurisdiction of Rashtriya Lokayukta should extend to all Ministers of
in the manner stated above. A time limit of 30 days may be prescribed for the Union (except the Prime Minister), all state Chief Ministers, all persons
processing this permission. holding public office equivalent in rank to a Union Minister, and Members
of Parliament. In case the enquiry against a public functionary establishes
the involvement of any other public official along with the public

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functionary, the Rashtriya Lokayukta would have the power to enquire retired Supreme Court Judges or retired Chief Justices of High Court,
against such public servant(s) also. by a Committee consisting of the Chief Minister, Chief Justice of the
High Court and the Leader of the Opposition in the Legislative Assembly.
c. The Prime Minister should be kept out of the jurisdiction of the Rashtriya
The same Committee should select the second member from
Lokayukta for the reasons stated in paras 4.3.7 to 4.3.11.
among eminent jurists/administrators. There is no need to have an Up-
d. The Rashtriya Lokayukta should consist of a serving or retired Judge of Lokayukta.
the Supreme Court as the Chairperson, an eminent jurist as Member and
c. The jurisdiction of the Lokayukta would extend to only cases involving
the Central Vigilance Commissioner as the ex-officio Member.
corruption. They should not look into general public grievances.
e. The Chairperson of the Rashtriya Lokayukta should be selected from a
d. The Lokayukta should deal with cases of corruption against Ministers
panel of sitting Judges of the Supreme Court who have more than three
and MLAs.
years of service, by a Committee consisting of the Vice President of India,
the Prime Minister, the Leader of the Opposition, the Speaker of the e. Each State should constitute a State Vigilance Commission to look into
Lok Sabha and the Chief Justice of India. In case it is not possible to cases of corruption against State Government officials. The Commission
appoint a sitting Judge, the Committee may appoint a retired Supreme should have three Members and have functions similar to that of the
Court Judge. The same Committee may select the Member (i.e. an eminent Central Vigilance Commission.
jurist) of the Rashtriya Lokayukta. The Chairperson and Member of the
Rashtriya Lokayukta should be appointed for only one term of three years f. The Anti Corruption Bureaus should be brought under the control of
and they should not hold any public office under government thereafter, the State Vigilance Commission.
the only exception being that they can become the Chief Justice of India,
g. The Chairperson and Members of the Lokayukta should be appointed
if their services are so required.
strictly for one term only and they should not hold any public office
f. The Rashtriya Lokayukta should also be entrusted with the task of under government thereafter.
undertaking a national campaign for raising the standards of ethics in
h. The Lokayukta should have its own machinery for investigation. Initially,
public life.
it may take officers on deputation from the State Government, but over
28. (4.4.9) The Lokayukta : a period of five years, it should take steps to recruit its own cadre, and
train them properly.
a. The Constitution should be amended to incorporate a provision making
it obligatory on the part of State Governments to establish the institution i. All cases of corruption should be referred to Rashtriya Lokayukta or
of Lokayukta and stipulate the general principles about its structure, power Lokayukta and these should not be referred to any Commission of
and functions. Inquiry.

b. The Lokayukta should be a multi-member body consisting of a judicial 29. (4.5.6) Ombudsman at the Local Levels
Member in the Chair, an eminent jurist or eminent administrator with
*a. A local bodies Ombudsman should be constituted for a group of districts
impeccable credentials as Member and the head of the State Vigilance
to investigate cases against the functionaries of the local bodies. The
Commission {as referred in para 4.4.9(e) below} as ex-officio Member.
State Panchayat Raj Acts and the Urban Local Bodies Act should be
The Chairperson of the Lokayukta should be selected from a panel of
amended to include this provision.

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*h. The economic offences unit of states need to be strengthened to effectively

*b. The local bodies Ombudsman should be empowered to investigate investigate cases and there should be better coordination amongst existing
cases of corruption or maladministration by the functionaries of the agencies.
local self governments, and submit reports to the competent authorities
for taking action. The competent authorities should normally take 31. (5.1.12) Citizens’ Initiatives
action as recommended. In case they do not agree with the
*a. Citizens’ Charters should be made effective by stipulating the service levels
recommendations, they should give their reasons in writing and the
and also the remedy if these service levels are not met.
reasons should be made public.
*b. Citizens may be involved in the assessment and maintenance of ethics in
30. (4.6.6) Strengthening Investigation and Prosecution
important government institutions and offices.
*a. The State Vigilance Commissions/Lokayuktas may be empowered to
*c. Reward schemes should be introduced to incentivise citizen’s initiatives.
supervise the prosecution of corruption related cases.
*d. School awareness programmes should be introduced, highlighting the
*b. The investigative agencies should acquire multi-disciplinary skills and
importance of ethics and how corruption can be combated.
should be thoroughly conversant with the working of various offices/
departments. They should draw officials from different wings of 32. (5.2.5) False Claims Act
government.
a. Legislation on the lines of the US False Claims Act should be enacted,
*c. Modern techniques of investigation should also be deployed like providing for citizens and civil society groups to seek legal relief against
electronic surveilance, video and audio recording of surprise fraudulent claims against the government. This law should have the
inspections, traps, searches and seizures. following elements:
*d. A reasonable time limit for investigation of different types of cases i. Any citizen should be able to bring a suit against any person or
should be fixed for the investigative agencies. agency for a false claim against the government.
*e. There should be sustained step-up in the number of cases detected ii. If the false claim is established in a court of law, then the person/
and investigated. The priorities need to be reoriented by focussing on agency responsible shall be liable for penalty equal to five times the
‘big’ cases of corruption. loss sustained by the exchequer or society.
*f. The prosecution of corruption cases should be conducted by a panel iii. The loss sustained could be monetary or non-monetary as in the
of lawyers prepared by the Attorney General or the Advocate General form of pollution or other social costs. In case of non-monetary
in consultation with Rashtriya Lokayukta or Lokayukta as the case loss, the court would have the authority to compute the loss in
may be. monetary terms.
*g. The anti-corruption agencies should conduct systematic surveys of iv. The person who brought the suit shall be suitably compensated
departments with particular reference to highly corruption prone ones out of the damages recovered.
in order to gather intelligence and to target officers of questionable
integrity.

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33. (5.3.5) Role of Media principles of such reforms must be: adoption of ‘single window’ approach,
minimizing hierarchical tiers, stipulating time limits for disposal etc.
*a. It is necessary to evolve norms and practices requiring proper screening
of all allegations/complaints by the media, and taking action to put them *b. The existing Departmental Manuals and Codes should be thoroughly
in the public domain. reviewed and simplified with a responsibility on the Head of the
Department to periodically update such documents and make available
*b. The electronic media should evolve a Code of Conduct and a self regulating soft-copies on-line and hard copies for sale. These manuals must be written
mechanism in order to adhere to a Code of Conduct as a safeguard against in very precise terms, and phrases like ‘left to the discretion of’, ‘as far as
malafide action. possible’, ‘suitable decision may be taken’ etc should be avoided. This
should be followed for all rules and regulations governing issue of
*c. Government agencies can help the media in the fight against corruption
permissions, licenses etc.
by disclosing details about corruption cases regularly.
*c. A system of rewards and incentives for simplification and streamlining of
34. (5.4.2) Social Audit
procedures may be introduced in each government organization.
*a. Operational guidelines of all developmental schemes and citizen centric
*d. The principle of ‘positive silence’ should generally be used, though this
programmes should provide for a social audit mechanism.
principle cannot be used in all cases. Wherever permissions/licenses etc
35. (6.2.5) Promoting Competition are to be issued, there should be a time limit for processing of the same
after which permission, if not already given, should be deemed to have
*a. Every Ministry/Department may undertake an immediate exercise to been granted. However, the rules should provide that for each such case
identify areas where the existing ‘monopoly of functions’ can be tempered the official responsible for the delay must be proceeded against.
with competition. A similar exercise may be done at the level of State
Governments and local bodies. This exercise may be carried out in a time 37. (6.4.7) Using Information Technology
bound manner, say in one year, and a road map laid down to reduce
*a. Each Ministry/Department/Organization of Government should draw up
‘monopoly’ of functions. The approach should be to introduce competition
a plan for use of IT to improve governance. In any government process,
along with a mechanism for regulation to ensure performance as per
use of Information Technology should be made only after the existing
prescribed standards so that public interest is not compromised.
procedures have been thoroughly re-engineered.
*b. Some Centrally Sponsored schemes could be restructured so as to provide
*b. The Ministry of Information and Technology needs to identify
incentives to States that take steps to promote competition in service
certain governmental processes and then take up a project of their
delivery.
computerization on a nationwide scale.
*c. All new national policies on subjects having large public interface (and
*c. For computerization to be successful, computer knowledge of
amendments to existing policies on such subjects) should invariably
departmental officers needs to be upgraded. Similarly, the NIC needs to
address the issue of engendering competition.
be trained in department specific activities, so that they could appreciate
36. (6.3.5) Simplifying Transactions each other’s view point and also ensure that technology providers
understand the anatomy of each department.
*a. There is need to bring simplification of methods to the center-stage of
administrative reforms. Leaving aside specific sectoral requirements, the broad

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38. (6.6.4) Integrity Pacts

c. In the Annual Performance Report of each officer, there should be a
*a. The Commission recommends encouragement of the mechanism of column where the officer should indicate the measures he took to control
‘integrity pacts’. The Ministry of Finance may constitute a Task Force corruption in his office and among subordinates. The reporting officer
with representatives from Ministries of Law and Personnel to identify the should then give his specific comments on this.
type of transactions requiring such pacts and to provide for a protocol
for entering into such a pact. The Task Force may, in particular, d. Supervisory officers who give clean certificates to subordinate corrupt
recommend whether any amendment in the existing legal framework like officers in their Annual Performance Reports should be asked to explain
the Indian Contract Act, and the Prevention of Corruption Act is required their position in case the officer reported upon is charged with an offence
to make such agreements enforceable. under the Prevention of Corruption Act. In addition, the fact that they
have not recorded adversely about the integrity of their subordinate
39. (6.7.3) Reducing discretion corrupt officers should be recorded in their reports.
*a. All government offices having public interface should undertake a review e. Supervisory officers should ensure that all offices under them pursue a
of their activities and list out those which involve use of discretion. In all policy of suo motu disclosure of information within the ambit of the Right
such activities, attempt should be made to eliminate discretion. Where it to Information Act.
is not possible to do so, well-defined regulations should attempt to ‘bound’
the discretion. Ministries and Departments should be asked to coordinate 41. (6.9.4) Ensuring Accessibility and Responsiveness
this task in their organizations/offices and complete it within one year.
*a. Service providers should converge their activities so that all services are
*b. Decision-making on important matters should be assigned to a committee delivered at a common point. Such common service points could also be
rather than individuals. Care has to be exercised, however, that this practice outsourced to an agency, which may then be given the task of pursuing
is not resorted to when prompt decisions are required. citizens, requests with concerned agencies.

*c. State Governments should take steps on similar lines, especially in local *b. Tasks, which are prone to corruption, should be split up into different
bodies and authorities, which have maximum ‘public contact’. activities that can be entrusted to different persons.

40. (6.8.7) Supervision *c. Public interaction should be limited to designated officers. A ‘single
window front office’ for provision of information and services to the
*a. The supervisory role of officers needs to be re-emphasised. It bears re- citizens with a file tracking system should be set up in all government
iteration that supervisory officers are primarily responsible for curbing departments.
corruption among their subordinates, and they should take all preventive
measures for this purpose. 42. (6.10.2) Monitoring Complaints

*b. Each supervisory officer should carefully analyze the activities in his/her a. All offices having large public interface should have an online complaint
organization/office, identify the activities which are vulnerable to tracking system. If possible, this task of complaint tracking should be
corruption and then build up suitable preventive and vigilance measures. outsourced.
All major instances of loss caused to the government or to the public, by
officials by their acts of omission or commission should be enquired into b. There should be an external, periodic mechanism of ‘audit’ of complaints
and responsibility fixed on the erring officer within a time-frame. in offices having large public interface.

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c. Apart from enquiring into each complaint and fixing responsibility 46. (6.15.2) Intelligence Gathering
for the lapses, if any, the complaint should also be used to analyse the
systemic deficiencies so that remedial measures are taken. *a. Supervisory officers should assess the integrity of his/her subordinates
based on his/her handling of cases, complaints and feedback from different
43. (6.12.7) Risk Management for Preventive Vigilance sources. This could then become an important input for risk profiling of
officers.
*a. Risk profiling of jobs needs to be done in a more systematic and
institutionlised manner in all government organizations. 47. (6.16.2) Vigilance Network
*b. Risk profiling of officers should be done by a committee of ‘eminent *a. A national database containing the details of all corruption cases at all
persons’ after the officer has completed ten years of service, and then levels should be created. This database should be in the public domain.
once in every five years. The committee should use the following inputs Identified authorities should be made responsible for updating the
in coming to a conclusion: database regularly.
(i) The performance evaluation of the reported officer. 48. (7.9). Protecting the Honest Civil Servant
(ii) A self-assessment given by the reported officer focusing on the *a. Every allegation of corruption received through complaints or from
efforts he/she has made to prevent corruption in his/her career. sources cultivated by the investigating agency against a public servant
must be examined in depth at the initial stage itself before initiating any
(iii) Reports from the vigilance organization.
enquiry. Every such allegation must be analyzed to assess whether the
(iv) A peer evaluation to be conducted confidentially by the committee allegation is specific, whether it is credible and whether it is verifiable.
through an evaluation form. Only when an allegation meets the requirements of these criteria, should
it be recommended for verification, and the verification must be taken
44. (6.13.2) Audit up after obtaining approval of the competent authority. The levels of
competent authorities for authorizing verifications/enquiries must be fixed
*a. It should be prescribed that as soon as any major irregularity is detected
in the anti-corruption agencies for different levels of suspect officers.
or suspected by the audit team, it should be immediately taken note of
by government. A suitable mechanism for this may be put in place. It *b. In matters relating to allegations of corruption, open enquiries should
shall be the responsibility of the head of the office to enquire into any not be taken up straightaway on the basis of complaints/source
such irregularity and initiate action. information. When verification/secret enquiries are approved, it should
be ensured that secrecy of such verifications is maintained and the
*b. Audit teams should be imparted training in forensic audit.
verifications are done in such a manner that neither the suspect officer
*c. Each office should make an annual public statement regarding pending nor anybody else comes to know about it. Such secrecy is essential not
audit queries. only to protect the reputation of innocent and honest officials but also to
ensure the effectiveness of an open criminal investigation. Such secrecy
45. (6.14.3) Proactive vigilance on corruption of verification/enquiry will ensure that in case the allegations are found
to be incorrect, the matter can be closed without anyone having come to
*a. Taking proactive vigilance measures should primarily be the
know of it. The Inquiry / Verification Officers should be in a position to
responsibility of the head of the office. Some possible measures are
appreciate the sensitivities involved in handling allegations of corruption.
indicated in para (6.14.2).

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*c. The evaluation of the results of verification/enquiries should be done in a AnnexureI(1)

competent and just manner. Much injustice can occur due to faulty
evaluation of the facts and the evidence collected in support of such facts.
Personnel handling this task should not only be competent and honest
but also impartial and imbued with a sense of justice. National Colloquium on
“Ethics in Governance – Moving from Rhetoric to Results”
*d. Whenever an Inquiry Officer requires to consult an expert to understand
technical / complex issues, he can do so, but the essential requirement of Organized by
proper application of mind has to take place at every stage to ensure that The Administrative Reforms Commission and
no injustice is caused to the honest and the innocent. The National Judicial Academy

*e. Capacity building in the anti-corruption agencies should be assured Valedictory Address
through training and by associating the required experts during enquiries/ (02nd September, 2006)
investigations. Capacity building among public servants who are expected
to take commercial / financial decisions should be built through suitable
Justice Y. K. Sabharwal,
training programmes.
Chief Justice of India
*f. The supervisory officers in the investigating agencies should ensure that only
those public servants are prosecuted against whom the evidence is strong. Ever since independence, India has been one of the front-runners in the comity of nations
that cherish principles of civil society. India sought to redeem the pledge taken in this behalf
*g. There should be profiling of officers. The capabilities, professional by evolving a Constitution that dreamt of establishing an egalitarian society based on
competence, integrity and reputation of every government servant must principles of equality, fairness and justice, one characterized by the belief that all people
be charted out and brought on record. Before proceeding against any should have equal political, social and economic rights. Our system of governance is founded
government servant, reference should be made to the profile of the on the lofty principle of rule of law, wherein the State power is divided amongst three chief
government servant concerned. organs, each under a duty to conduct itself in a manner that subserves the common good of
all and achieve the objectives of a welfare State. The checks and balances were put as inherent
*h. A special investigation unit should be attached to the proposed Lokpal safeguards designed to ensure compliance with the maxim “Be you ever so high, the law is
(Rashtriya Lokayukta)/State Lokayuktas/Vigilance Commission, to above you”. The dicta of the Constitution is crystal clear; namely, the goal of good governance.
investigate allegations of corruption against investigative agencies. This
unit should be multi-disciplinary and should also investigate cases of After having seen the way our polity works on the demands of the civil society, the
allegations of harassment against the investigating agency. Similar units Government of the day had set up, in 1966, a Commission of Inquiry that came to be
should also be set up in States. known as the Administrative Reforms Commission. The recommendations of the said first
Administrative Reforms Commission brought about qualitative changes in the system of
governance in our country focusing, in the process, on issues as wide ranging as the structure
of the administrative machinery, decentralization of powers & functions, revamp of financial
management and, of course, the issue of dealing with corruption, a subject that has been the
mother of all issues from times immemorial.

Much water has flown down the Ganges ever since. India has come a long way in many
ways. The population of the country has multiplied geometrically; the expectations of the

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 5

FIFTH REPORT

SECOND ADMINISTRATIVE REFORMS COMMISSION

PUBLIC ORDER
PUBLIC ORDER

Second Administrative Reforms Commission Justice for each . . . Peace for all
Government of India

2nd Floor, Vigyan Bhawan Annexe, Maulana Azad Road, New Delhi 110 011
e-mail : arcommission@nic.in website : http://arc.gov.in JUNE 2007
 CONCLUSION The Commission notes that some of the changes proposed may take time to implement. But
every long journey begins with a small step. There is need for an enlightened political will
Public order goes beyond being just another issue in the realm of good governance. It is
to accept and bring about these changes, which we believe are fundamental and essential
indeed at the core of it, the most vital aspect of our democracy, of our very existence as
for the maintenance of public order and a harmonious society.
a nation. The rule of law, in its widest sense, creates, and is also the effect of, an orderly,
cultured, wise and equitable society.

The importance of this Report lies in the attempt of the Commission to find new ways by
which the rule of law would be upheld and our democracy strengthened. The Commission
has tried to move beyond the straitjacket of the existing structures and systems of those
wings of government which are directly involved in the maintenance of public order. Our
recommendations, in their implementation, would require restructuring of the police in
India and the involvement of not merely the Union and the States, but also of the third
tier of governance, the local bodies. At the center of our proposals is the citizen, especially
the vulnerable sections of our society.

In our task, we have had the benefit of the thinking and the advice offered by previous
Commissions and Committees. The pronouncements of the Supreme Court and the various
High Courts have been before us and have guided the Commission in its deliberations.
The issues that have been considered by such eminent bodies have greatly facilitated the
Commission in arriving at its recommendations for holistic and overarching reform.

Public order is a critical necessity for progress. An unruly society would be a recipe
for economic disaster. Ultimately the quality of life of our citizens is in great measure
dependent upon the maintenance of public order. There is a gowing concern
that in the eyes of the law enforcing agencies some are more equal than others.
It has been the endeavour of this Commission to propose changes which would
substantially remove such a perception, reduce the scope for extraneous influences
to bear upon the functioning of the police and make them professional, fair and
citizen-friendly.

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 SUMMARY OF RECOMMENDATIONS

1. (Para 5.2.1.8) State Government and the Police

a. The following provision should be incorporated in the respective Police

Acts:

It shall be the responsibility of the State Government to ensure efficient,

effective, responsive and accountable functioning of police for the entire
state. For this purpose, the power of superintendence of the police service
shall vest in and be exercised by the State Government in accordance with
the provisions of law.

The State Government shall exercise its superintendence over the police in
such manner and to such an extent as to promote the professional efficiency of
the police and ensure that its performance is at all times in accordance with
the law. This shall be achieved through laying down policies and guidelines,
setting standards for quality policing, facilitating their implementation and
ensuring that the police performs its task in a professional manner with
functional autonomy.

No government functionary shall issue any instructions to any police

functionary which are illegal or malafide.

b. ‘Obstruction of justice’ should also be defined as an offence under

the law.

2. (Para 5.2.2.30) Separation of Investigation from other Functions

a. Crime Investigation should be separated from other policing functions.

A Crime Investigation Agency should be constituted in each state.

b. This agency should be headed by a Chief of Investigation under the

administrative control of a Board of Investigation, to be headed by a retired/
sitting judge of the High Court. The Board should have an eminent lawyer,
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 Public Order Summary of Recommendations

an eminent citizen, a retired police officer, a retired civil servant, the Home • Home Minister (Chairman)
Secretary (ex-officio), the Director General of Police (ex-Officio), Chief of • Leader of Opposition in the State Assembly
the Crime Investigation Agency (ex-officio) and the Chief of Prosecution • Chief Secretary
(ex-officio) as Members. • Secretary in charge of the Home Department;
• Director General of Police as its Member Secretary
c. The Chairman and Members of the Board of Investigation should be • (For matters pertaining to Director General of Police, including his
appointed by a high-powered collegium, headed by the Chief Minister appointment, the Home Secretary shall be the Member Secretary)
and comprising the Speaker of the Assembly, Chief Justice of the High • Five non-partisan eminent citizens
Court, the Home Minister and the Leader of Opposition in the Legislative
Assembly. The Chief of Investigation should be appointed by the State b. The State Police Performance and Accountability Commission should
Government on the recommendation of the Board of Investigation. perform the following functions:
• frame broad policy guidelines for promoting efficient, effective, responsive
d. The Chief of the Crime Investigation Agency should have full autonomy and accountable policing, in accordance with law;
in matters of investigation. He shall have a minimum tenure of three • prepare panels for the office of Director General of Police against prescribed
years. He can be removed within his tenure for reasons of incompetence criteria;
or misconduct, but only after the approval of the Board of Investigation. • identify performance indicators to evaluate the functioning of the police
The State Government should have power to issue policy directions and service; and
guidelines to the Board of Investigation. • review and evaluate organizational performance of the police service.
e. All crimes having a prescribed punishment of more than a defined limit c. The method of appointment of the Chairman and Members of the State
(say three or more years of imprisonment) shall be entrusted to the Crime Police Performance and Accountability Commission should be as stipulated
Investigation Agency. Registration of FIRs and first response should be in the Draft Model Police Act.
with the ‘Law and Order’ Police at the police station level.
d. The State Government should appoint the Chief of Law and Order
f. The existing staff could be given an option of absorption in any of the Police from the panel recommended by the State Police Performance and
Agencies – Crime Investigation, Law and Order and local police. But Accountability Commission. The panel will be for the ‘office’ of Director
once absorbed, they should continue with the same Agency and develop General of Police and not to other posts of the ‘rank’ of DGP.
expertise accordingly. This would also apply to senior officers.
e. The tenure of the Chief of the Law and Order Police as well as the Chief
g. Once the Crime Investigation Agency is staffed, all ranks should develop of the Crime Investigation Agency should be at least three years. But this
expertise in that field and there should be no transfer to other Agencies. tenure should not become a hindrance for removal in case the Chief is
found to be incompetent or corrupt or indulges in obstruction of justice
h. Appropriate mechanisms should be developed to ensure coordination
or is guilty of a criminal offence. The State Government should have
between the Investigation, Forensic and the Law and Order Agencies, at
powers to remove the Police Chief but such order of removal should be
the Local, District and the State levels.
passed only after it has been cleared by the State Police Performance and
3. (Para 5.2.3.7) Accountability of Law and Order Machinery Accountability Commission (or the State Investigation Board, in the case
of Chief of Investigation).
a. A State Police Performance and Accountability Commission should be
constituted, with the following as Members:

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 Public Order Summary of Recommendations

4. (Para 5.2.4.9) Police Establishment Committees g. The Board of Investigation should have full and final control on all personnel
matters of Crime Investigation Agency. Therefore, the Board should act as
a. A State Police Establishment Committee should be constituted. It should the establishment committee for all senior functionaries in investigation
be headed by the Chief Secretary . The Director General of Police should and prosecution. An appropriate committee may be constituted at the
be the Member Secretary and the State Home Secretary and a nominee of district level by the Board, for dealing with non-gazetted officials.
the State Police and Accountability Commission should be the Members.
This Committee should deal with cases relating to officers of the rank of 5. (Para 5.3.13) Competent Prosecution and Guidance to Investigation
Inspector General of Police and above.
a. A system of District Attorney should be instituted. An officer of the rank of
b. A separate State Police Establishment Committee should be set up District Judge should be appointed as the District Attorney. The District
with the Chief of Law and Order Police as its Chairperson and two Attorney shall be the head of Prosecution in a District (or group of
senior police officers and a member of the State Police Performance and Districts). The District Attorney shall function under the Chief Prosecutor
Accountability Commission as Members (All Members of this Committee of the State. The District Attorney should also guide investigation of crimes
should be nominated by the State Police Performance and Accountability in the district.
Commission) to deal with cases relating to all gazetted officers up to the
rank of Deputy Inspector General of Police. b. The Chief Prosecutor for the State shall be appointed by the Board of
Investigation for a period of three years. The Chief Prosecutor shall be an
c. These Committees should deal with all matters of postings and transfers, eminent criminal lawyer. The Chief Prosecutor would supervise and guide
promotions and also grievances relating to establishment matters. The the District Attorneys.
recommendations of these Committees shall normally be binding on the
Competent Authority. However, the Competent Authority may return the 6. (Para 5.4.7) Local Police and Traffic Management
recommendations for reconsideration after recording the reasons.
a. A task force may be constituted in the Ministry of Home Affairs to
d. Similarly, a District Police Establishment Committee (City Police identify those laws whose implementation, including investigation of
Committee) should be constituted under the Superintendent/Commissioner violations could be transferred to the implementing departments. A similar
of Police. This Committee should have full powers in all establishment task force should look into the state laws in each state.
matters of non-gazetted police officers.
b. To start with, departments like the State Excise, Forest, Transport
e. For inter-district transfers of non-gazetted officers, the State level and Food with enforcement divisions may take some officers from the
Establishment Committee may deal with it or delegate it to a Zonal or a police department of appropriate seniority on deputation and form
Range level Committee. small investigation outfits by drawing departmental officers from
corresponding ranks for the purpose of investigating cases of violations
f. All officers and staff should have a minimum tenure of three years. Should of appropriate laws; after a transition period, the concerned department
the Competent Authority wish to make pre-mature transfer, it should should endeavour to acquire expertise and build capacity to cope with the
consult the concerned establishment committee for their views. If the views investigation work with its own departmental officials.
of the establishment are not acceptable to the Competent Authority, the
reasons should be recorded before the transfer is affected, and put in the c. A Municipal Police Service should be constituted in Metropolitan
public domain. cities having population of more than one million. The Municipal
Police should be empowered to deal with the offences prescribed under
the municipal laws.
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 Public Order Summary of Recommendations

d. The function of Traffic control (along with traffic police) may be transferred c. Recruitment of constables would, however, continue in the Armed
to the local governments in all cities having a population of more than one Police.
million.
d. The orderly system should be abolished with immediate effect.
7. (Para 5.5.4) The Metropolitan Police Authorities
e. The procedure for recruitment of police functionaries should be totally
a. All cities with population above one million should have Metropolitan transparent and objective.
Police Authorities. This Authority should have powers to plan and oversee
community policing, improving police-citizen interface, suggesting ways f. Affirmative action should be taken to motivate persons from different
to improve quality of policing, approve annual police plans and review sections of society to join the police service. Recruitment campaigns should
the working of such plans. be organised to facilitate this process.

b. The Authorities should have nominees of the State Government, elected 10. (Para 5.8.4) Welfare Measures for the Police
municipal councilors, and non partisan eminent persons to be appointed
a. Rational working hours should be strictly followed for all police
by the government as Members. An elected Member should be the
personnel.
Chairperson. This Authority should not interfere in the ‘operational
functioning’ of the police or in matters of transfers and postings. In order b. Welfare measures for police personnel in the form of improved working
to ensure this, it should be stipulated that individual members will have conditions, better education facilities for their children, social security
no executive functions nor can they inspect or call for records. Once the measures during service, as well as post retirement should be taken up on
system stabilizes, this Authority could be vested with more powers in a priority.
phased manner.
c. Major housing construction programmes for police personnel should be
8. (Para 5.6.2) Reducing Burden of Police - Outsourcing Non Core Functions taken up in a time bound manner in all states.
a. Each State Government should immediately set up a multi-disciplinary 11. (Para 5.9.15) Independent Complaints Authorities
task force to draw up a list of non-core police functions that could be
outsourced to other agencies. Such functions should be outsourced in a a. A District Police Complaints Authority should be constituted to enquire
phased manner. into allegations against the police within the district. The District Police
Complaints Authority should have an eminent citizen as its Chairperson,
b. Necessary capacity building exercise would have to be carried out for such with an eminent lawyer and a retired government servant as its Members.
agencies and functionaries in order to develop their skills in these areas. The Chairperson and Members of the District Police Complaints Authority
should be appointed by the State Government in consultation with the
9. (Para 5.7.10) Empowering the ‘Cutting Edge’ Functionaries
Chairperson of the State Human Rights Commission. A government
a. The existing system of the constabulary should be substituted with officer should be appointed as Secretary of the District Police Complaints
recruitment of graduates at the level of Assistant Sub- Inspector of Police Authority.
(ASI).
b. The District Police Complaints Authority should have the powers to enquire
b. This changeover could be achieved over a period of time by stopping into misconduct or abuse of power against police officers up to the rank of
recruitment of constables and instead inducting an appropriate number Deputy Superintendent of Police. It should exercise all the powers of a civil
of ASIs.
258 259
 Public Order Summary of Recommendations

court. The Authority should be empowered to investigate any case itself or audit of police stations and other police offices through inspections and
ask any other agency to investigate and submit a report. The Disciplinary review of departmental inspections. It should render professional advice
Authorities should normally accept the recommendations of the District for improvement of standards in policing and also present an annual report
Authorities. to the Police Performance and Accountability Commission.

c. A State Police Complaints Authority should be constituted to look into b. For all cases of deaths during ‘encounters’ the Independent Inspectorate
cases of serious misconduct by the police. The State level Authority should of Police should commence an enquiry within 24 hours of the incident.
also look into complaints against officers of the rank of Superintendent The Inspectorate should submit its report to the PPAC and the SPAC
of Police and above. The State Police Complaints Authority should c. The working of the Bureau of Police Research and Development needs to
have a retired High Court Judge as Chairperson and nominees of the be strengthened by adequate financial and professional support, so that it
State Government, the State Human Rights Commission, the State Lok could function effectively as an organization for inter alia analysis of data
Ayukta, and the State Women Commission. An eminent human rights from all parts of the country and establish standards regarding different
activist should be also be the member of the Complaints Authority. The aspects of the quality of police service.
Chairperson and the Member of the Authority (eminent human rights
activist) should be appointed by the State Government based on the 13. (Para 5.11.8) Improvement of Forensic Science Infrastructure - Professionalisation
recommendations of the State Human Rights Commission. (In case the of Investigation
State Human Rights Commission has not been constituted, then the State
a. There is need to set up separate National and State Forensic Science
Lok Ayukta may be consulted). A government officer should officiate as
Organisations as state-of-the-art scientific organizations. At the state level
the secretary of the Authority. The Authority should have the power to
these organisations should function under the supervision of the Board of
ask any agency to conduct an enquiry or enquire itself. The Authority
Investigation.
should also be empowered to enquire into or review any case of police
misconduct, which is before any District Police Complaints Authority, if b. There is need to expand the forensic facilities and upgrade them
it finds it necessary in public interest to do so. technologically. Every district or a group of districts having 30 to 40 lakhs
population should have a forensic laboratory. This should be achieved over
d. It should be provided that if upon enquiry it is found that the complaint
a period of five years. Government of India should earmark funds for this
was frivolous or vexatious, then the Authority should have the power to
purpose for assisting the states under the police modernisation scheme. All
impose a reasonable fine on the complainant.
the testing laboratories should be accredited to a National Accreditation
e. The State Police Complaints Authority should also monitor the functioning Body for maintaining quality standards.
of the District Police Complaints Authority.
c. The syllabus of MSc Forensic Science should be continuously upgraded in
line with international trends.
f. The Complaint Authorities should be given the powers of a civil court. It
should be mandated that all complaints should be disposed of within a d. Necessary amendments should be effected in the CrPC and other laws
month. to raise the level and scope of forensic science evidence and recognize its
strength for criminal justice delivery.
12. (Para 5.10.4) An Independent Inspectorate of Police
14. (Para 5.12.6) Strengthening Intelligence Gathering
a. In addition to ensuring effective departmental inspections, an Independent
Inspectorate of Police may be established under the supervision of the Police a. The intelligence gathering machinery in the field needs to be
Performance and Accountability Commission to carry out performance strengthened and at the same time, made more accountable. Human
260 261
 Public Order Summary of Recommendations

intelligence should be combined with information derived from diverse c. Each state should earmark a fixed percentage of the police budget for
sources with the focus on increased use of technology. Adequate powers training purposes.
should be delegated to intelligence agencies to procure/use latest
technology. d. For each level of functionary, a calendar of training for the entire career
should be laid down.
b. Intelligence agencies should develop multi-disciplinary capability
by utilising services of experts in various disciplines for intelligence e. There should be common training programmes for police, public prosecutors
gathering and processing. Sufficient powers should be delegated to them and magistrates. There should also be common training programmes for
to obtain such expertise. police and executive magistrates.

c. Intelligence should be such that the administration is able to use it to f. Training should focus on bringing in attitudinal change in police so that
act in time by resorting to conflict management or by taking preventive they become more responsive and sensitive to citizens’ needs.
measures.
g. All training programmes must conclude with an assessment of the trainees,
d. Instead of monitoring public places by posting a large number of policemen preferably by an independent agency.
it would be economical as well more effective if devices like video cameras/
h. Modern methods of training such as case study method should be used.
CCTVs are installed in such places.
i. Impact of training on the trainees should be evaluated by independent field
e. The beat police system should be revived and strengthened.
studies and based on the findings the training should be redesigned.
f. Informants giving information should be protected to keep their identity
j. All training programmes should include a module on gender and human
secret so that they do not fear any threat to life or revenge. However, they
rights. Training programmes should sensitise the police towards the weaker
could be given a masked identity by which they could claim their reward at
sections.
an appropriate time and also continue to act as informants as the situation
develops. 16. (Para 5.16.6) Gender Issues in Policing
g. In case of major breakdown of public order, the State Police Complaints a. The representation of women in police at all levels should be increased
Authority should take appropriate action to fix responsibility on the police through affirmative action so that they constitute about 33% of the
officers for lapses in acting upon intelligence or on the intelligence officers police.
in case there has been a failure on their part.
b. Police at all levels as well as other functionaries of the criminal justice system
15. (Para 5.13.5) Training of the Police need to be sensitised on gender issues through well structured training
programmes.
a. Deputation to training institutions must be made more attractive in terms
of facilities and allowances so that the best talent is drawn as instructors. c. Citizens groups and NGOs should be encouraged to increase awareness
The Chief of Training in the state should be appointed on the recommendation about gender issues in society and help bring to light violence against
of the Police Performance and Accountability Commission. women and also assist the police in the investigation of crimes against
women.
b. The instructors should be professional trainers and a balanced mix of
policemen and persons from other walks of life should be adopted.

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 Public Order Summary of Recommendations

17. (Para 5.17.9) Crimes against Vulnerable Sections coordination between the Union and the states and among the states.
These protocols should cover issues like information/intelligence sharing,
a. The administration and police should be sensitised towards the special joint investigation, joint operations, inter-state operations by a state police
problems of the Scheduled Castes and Scheduled Tribes. Appropriate in another state, regional cooperation mechanisms and the safeguards
training programmes could help in the sensitising process. required.
b. The administration and police should play a more pro-active role in 20. (Para 6.1.2.4) Measures to be Taken during Peace Time
detection and investigation of crimes against the weaker sections.
a. The administration should be responsive, transparent, vigilant and fair in
c. Enforcement agencies should be instructed in unambiguous terms that dealing with all sections of society. Initiatives such as peace committees
enforcement of the rights of the weaker sections should not be downplayed should be utilised effectively to ease tensions and promote harmony.
for fear of further disturbances or retribution and adequate preparation
should be made to face any such eventuality. b. The internal security plan/riot control scheme should be updated periodically
in consultation with all stakeholders and in the light of previous episodes.
d. The administration should also focus on rehabilitation of the victims and The role of all major functionaries should be clearly explained to them.
provide all required support including counselling by experts.
c. A micro analysis should be carried out in each district to identify sensitive
e. As far as possible the deployment of police personnel in police stations spots and this should be regularly reviewed and updated.
with significant proportion of religious and linguistic minorities should
be in proportion to the population of such communities within the local d. The intelligence machinery should not slacken during normal times and
jurisdiction of such police station. The same principle should be followed credible intelligence should be gathered from multiple sources.
in cases of localities having substantial proportion of Scheduled Castes
and Scheduled Tribes population. e. Regulatory laws such as the Arms Act, 1959, Explosives Act, 1884 and
Municipal Laws related to construction of structures should be enforced
f. Government must take concrete steps to increase awareness in the rigorously.
administration and among the police in particular, regarding crimes against
children and take steps not only to tackle such crimes, but also to deal with f. Public agencies should follow a zero tolerance strategy in dealing with
the ensuing trauma. violations of laws.

18. (Para 5.18.9) National Security Commission 21. (Para 6.1.3.1.3) Security Proceedings

a. There is no need for a National Security Commission with a limited function a. The use of preventive measures in a planned and effective manner needs
of recommending panels for appointment to Chiefs of the Armed Forces to be emphasized. Training and operational manuals for both Executive
of the Union. There should be a separate mechanism for recommending Magistrates and police need to be revised on these lines.
the names for appointment as Chief of each one of these forces, with the
b. Regular supervision and review of these functionaries by the DM and the
final authority vesting in the Union Government.
SP respectively should be done to focus attention on effective use of these
19. (Para 5.19.6) Union-State and Inter-State Cooperation and Coordination provisions. For this purpose, a joint review on a periodic basis by the DM
and SP should be done.
a. The Ministry of Home Affairs should proactively and in consultation
with the states, evolve formal institutions and protocols for effective
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 Public Order Summary of Recommendations

22. (Para 6.1.3.2.7) Addressing Property Disputes to Prevent Disruption of Public c. Organisations and persons found guilty of instigating violence should be
Order liable to pay exemplary damages. The damages should be commensurate
with the loss caused by such violence. The law should provide for
a. An Explanation may be inserted below Section 145 of the Code of Criminal distribution of the proceeds of damages to the victims of such violence.
Procedure clarifying that when from the evidence available with the
Executive Magistrate it is clear that there is an attempt to dispossess a person 24. (Para 6.1.5.3) Imposition of Prohibitory Orders
or where a person has been illegally dispossessed of his property within
sixty days of filing the complaint and that such acts cause a reasonable a. Prohibitory orders once imposed, should be enforced effectively.
apprehension of a breach of the peace, such magistrate can pass an order Videography should be used in sensitive areas.
contemplated in sub- section (6) of the aforesaid Section notwithstanding
25. (Para 6.1.6.6) Measures to be Taken Once a Riot has Started
pendency of a civil case between the parties involving the same property.
a. If violence erupts, then the first priority should be to quickly suppress the
b. A time frame of six months may be stipulated for concluding the
violence. In cases of communal violence, the situation should be brought under
proceedings.
control by effective use of force.
c. Specific but indicative guidelines may be issued by the Ministry of Urban
b. Prohibitory orders must be enforced rigorously.
Development to the State Governments to lay down the minimum standards
for maintenance of land records in urban areas including municipal ward c. If the situation so warrants, the forces of the Union and the Army
maps so as to minimize possibility of disputes about possession and should be requisitioned and used without any reluctance or delay.
boundary of immoveable property.
d. The Commissioner of Police or the District Magistrate and the Superintendent
d. Detailed guidelines already exist in almost all states to periodically update of Police should be given a free hand to deal with the situation in accordance
land records in rural areas. Strict compliance of such guidelines needs to with law.
be ensured as out of date land records contribute to disputes and resultant
breaches of peace. e. The media should be briefed with correct facts and figures so that there is no
scope for rumour mongering.
23. (Para 6.1.4.5) Regulating Processions, Demonstrations and Gatherings
f. The police needs to be equipped with state-of-the-art crowd dispersal
a. Based on the experience with major riots and the recommendations of equipments.
various Commissions of Inquiry and pronouncements of the Supreme
Court and the High Courts, fresh and comprehensive guidelines may be g. The District Magistrate should ensure that essential supplies are maintained
drawn up for regulation of processions, protest marches and morchas. and relief is provided, especially in vulnerable areas and particularly during
prolonged spells of ‘curfew’.
b. The guidelines should include preparatory steps (through intelligence
sources), serious consultation and attempts to arrive at agreement with the 26. (Para 6.1.7.9) Measures to be Taken Once Normalcy has been Restored
groups/ communities involved, regarding route, timing and other aspects
of procession. They should also cover prohibition of provocative slogans a. No sanction of the Union Government or the State Government should be
or acts as well as carrying of lethal weapons. It should be specifically stated necessary for prosecution under Section 153(A). Section 196 Cr PC should
in the guidelines that all processions or demonstrations should be dealt be amended accordingly.
with the same degree of fairness and firmness.
b. Prosecution in cases related to rioting or communal offences should be not
266 sought to be withdrawn. 267
 Public Order Summary of Recommendations

c. Commissions of Inquiry into any major riots/violence should give their v. situations arising out of any external aggression or internal
report within one year. disturbances;

d. The recommendations made by a Commission of Inquiry should normally vi. any similar matter, not within the purview of any one department
be accepted by the Government and if the Government does not agree and affecting the general welfare of the public of the district;
with any observation or recommendation contained in the report of the
Commission, it should record its reasons and make them public. vii. removal of any persistent public grievance (as to what constitutes
persistent public grievance, the decision of the DM shall be
e. All riots should be documented properly and analysed so that lessons could final); and
be drawn from such experiences.
viii. whenever police assistance is required to enforce/implement any law
f. There is need for adequate follow up to ensure proper rehabilitation of or programme of the government.
victims.
b. These directions shall be binding on all concerned. Directions in respect
27. (Para 6.2.4) Accountability of Public Servants Charged with Maintaining of item No. ii should normally be issued in consultation with the
Public Order Superintendent of Police.

a. The State Police Complaints Authority should be empowered to identify 29. (Para 6.4.2) Capability Building of Executive Magistrates
and fix responsibility in cases of glaring errors of omission and commission
by police and executive magistrates in the discharge of their duties relating a. All officers likely to be posted as Executive Magistrates should be specially
to the maintenance of public order. trained in the relevant laws and procedures and should be eligible for
posting only after qualifying in an examination.
28. (Para 6.3.15) The Executive Magistrates and the District Magistrate
b. On the lines of a police manual, each state should also evolve a Manual for
a. The position of the District Magistrate vis-à-vis the police, and as a Executive Magistrates.
coordinator and facilitator in the district needs to be strengthened. The
District Magistrate should be empowered to issue directions under the 30. (Para 6.5.7) Inter-Agency Coordination
following circumstances:
a. In a District, the District Magistrate should coordinate the role of all
i. promotion of land reforms and settlement of land disputes; agencies at the time of crisis.

ii. extensive disturbance of public peace and tranquility in the district b. In major cities, with the Police Commissioner System, a coordination
(The decision of the DM as to what constitutes extensive disturbance committee should be set up under the Mayor, assisted by the Commissioner
of public peace should be final); of Police and the Municipal Commissioner. All major service providers
should be represented on this Coordination Committee.
iii. conduct of elections to any public body;
31. (Para 6.6.4) Adoption of Zero Tolerance Strategy
iv. handling of natural calamities and rehabilitation of the persons
affected thereby; a. All public agencies should adopt a zero tolerance strategy towards crime, in
order to create a climate of compliance with laws leading to maintenance
of public order.

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b. This strategy should be institutionalised in the various public agencies by c. Amendments to the CrPC should be made as suggested by the National
creating appropriate statistical databases, backed up by modern technology, Police Commission.
to monitor the level and trends of various types of offences and link these
to a system of incentives and penalties for the officials working in these d. The performance of police stations should be assessed on the basis of the
agencies. It should be combined with initiatives to involve the community cases successfully detected and prosecuted and not on the number of cases
in crime prevention measures. registered. This is necessary to eliminate the widely prevalent malpractice
of ‘burking’ of cases.
32. (Para 7.3.7) Facilitating Access to Justice - Local Courts
34. (Para 7.5.2.4) Inquests
a. A system of local courts should be introduced as an integral part of the
judiciary. There should be one such court for a population of 25,000 in a. All State Governments should issue Rules prescribing in detail the procedure
rural areas (this norm could be modified for urban areas). for inquests under Section 174 CrPC.

b. The local courts should have powers to try all criminal cases where the 35. (Para 7.5.3.13) Statements Made before a Police Officer
prescribed punishment is less than one year. All such trials should be
a. Sections 161 and 162 of CrPC should be amended to include the
through summary proceedings.
following:
c. The judge of the local court should be appointed by the District and
i. The statement of witnesses should be either in narrative or in question
Sessions Judge in consultation with his/her two senior-most colleagues.
and answer form and should be signed by the witness.
Retired judges or retired government officers (with appropriate experience)
could be appointed. ii. A copy of the statement should be handed over to the witness
immediately under acknowledgement.
d. These courts may function from government premises and could also be
in the form of mobile courts. iii. The statement could be used for both corroboration and contradiction
in a Court of Law.
e. These local courts may be constituted by a law passed by the Parliament
to ensure uniformity. b. The statements of all important witnesses should be either audio or video
recorded.
33. (Para 7.5.1.11) Citizen Friendly Registration of Crimes
36. (Para 7.5.4.10) Confessions before Police
a. Registration of FIRs should be made totally citizen friendly. Technology
should be used to improve the accessibility of police stations to the public. a. Confessions made before the police should be admissible. All such
Establishing call centers and public kiosks are possible options in this statements should be video-recorded and the tapes produced before the
regard. court. Necessary amendments should be made in the Indian Evidence
Act.
b. Police stations should be equipped with CCTV cameras in order to prevent
malpractice, ensure transparency and make the police more citizen-friendly. b. The witness/accused should be warned on video tape that any statement
This could be implemented in all police stations within a time frame of he makes is liable to be used against him in a court of law, and he is
five years. entitled to the presence of his lawyer or a family member while making

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such a statement. If the person opts for this, the presence of the lawyer/ 41. (Para 7.7.5.6) Victim Protection
family member should be secured before proceeding with recording the
statement. a. A new law for protecting the rights of the victims of the crimes may be
enacted. The law should include the following salient features:
c. The accused should be produced before a magistrate immediately thereafter,
who shall confirm by examining the accused whether the confession was i. Victims should be treated with dignity by all concerned in the criminal
obtained voluntarily or under duress. justice system.

d. The above-mentioned recommendations should be implemented only if ii. It shall be the duty of the police and the prosecution to keep the
the reforms mentioned in Chapter 5 are accepted. victim updated about the progress of the case.

37. (Para 7.7.1.10) The Judge’s Obligation to Ascertain the Truth iii. If the victim wants to oppose the bail application of an accused he/she
shall be given an opportunity to be heard. Similarly, for release of
a. It is necessary to amend Section 311 CrPC and impose a duty on every court prisoners on parole, a mechanism should be developed to consider
to suo motu cause production of evidence for the purpose of discovering the views of the victims.
the truth, which should be the ultimate test of the criminal justice system.
Suitable amendments to the Indian Evidence Act, 1872 may also be made iv. A victim compensation fund should be created by State Governments
to facilitate this. for providing compensation to the victims of crime.

38. (Para 7.7.2.14) Right to Silence 42. (Para 7.7.6.6) Committal Proceedings

a. Regarding grave offences like terrorism and organised crimes, in the case a. Committal proceedings should be reintroduced where the magistrate should
of refusal by the accused to answer any question put to him, the court may have powers to record the evidence of prosecution witnesses. Suitable
draw an inference from such behaviour. This may be specifically provided amendments may be carried out in Chapter XVI of the Code of Criminal
in the law. Procedure.

39. (Para 7.7.3.6) Perjury 43. (Para 7.8.5) Classification of Offences

a. The penalties provided under Section 344 CrPC for those found guilty of a. A comprehensive reclassification of offences may be done urgently to reduce
perjury after a summary trial should be enhanced to a minimum of one the burden of work for both the Courts and the Police. A mechanism for
year of imprisonment. ensuring regular and periodic review of offences should also be put in place
to make such reclassification an ongoing and continuing exercise.
b. It should be made incumbent upon the Courts to ensure that existing
perjury laws providing for summary trial procedure are unfailingly and b. The objective of this exercise should be to ensure that crimes of a petty
effectively applied by the trial courts, without awaiting the end of the main nature including those which require correctional rather than penal action
trial. should be taken out of the jurisdiction of the police and criminal courts so
that they are able to attend to more serious crimes. Such offences should,
40. (Para 7.7.4.6) Witness Protection in future be handled by the local courts.

a. A statutory programmme for guaranteeing anonymity of witnesses and for

witness protection in specified types of cases, based on the best international
272 models should be adopted early. 273
 Public Order Summary of Recommendations

44. (Para 7.9.7) Sentencing Process 47. (Para 8.3.14) Federal Crimes

a. The Law Commission may lay down ‘Guidelines’ on sentencing for the Trial a. There is need to re-examine certain offences which have inter-state or
Courts in India so that sentencing across the country for similar offences national ramification and include them in a new law. The law should also
becomes broadly uniform. prescribe the procedure for investigation and trials of such offences. The
following offences may be included in this category:
b. Simultaneously, the training for trial court judges should be strengthened
to bring about greater uniformity in sentencing. i. Organised Crime (examined in paragraph 8.4)
ii. Terrorism
45. (Para 7.10.14) Prison Reforms iii. Acts threatening National security
iv. Trafficking in arms and human beings
a. The Union and State Governments should work out, fund and implement
v. Sedition
at the earliest, modernisation and reforms of the Prison System as
vi. Major crimes with inter-state ramifications
recommended by the All India Committee on Jail Reforms (1980-83).
vii. Assassination of (including attempts on) major public figures
b. The attendant legislative measures should also be expedited. viii. Serious economic offences.

c. Rules regarding Parole and Remission need to be reviewed. An Advisory b. A new law should be enacted to govern the working of the CBI. This law
Board with a retired judge of the High Court, the DGP and the Inspector should also stipulate its jurisdiction including the power to investigate the
General of Prisons should be set up to make recommendations on parole. new category of crimes.
The recommendation made by the Board should normally be accepted.
c. The empowered committee recommended in the Commission’s Report on
In case of difference, State Government should obtain the advice of the
‘Ethics in Governance’ (para 3.7.19) would decide on cases to be taken
Board again, stating its own views in writing. A similar or the same Board
over by the CBI.
may deal with cases of remissions.
48. (Para 8.4.17 ) Organised Crime
46. (Para 8.2.15) Obligations of the Union and States
a. Specific provisions to define organised crimes should be included in the
a. A law should be enacted to empower the Union Government to deploy its
new law governing ‘Federal Crimes’. The definition of organised crime in
Forces and to even direct such Forces in case of major public order problems
this law should be on the lines of the Maharashtra Control of Organised
which may lead to the breakdown of the constitutional machinery in a
Crime Act, 1999.
state. However, such deployment should take place only after the state
concerned fails to act on a ‘direction’ issued by the Union under Article 256 49. (Para 8.5.17) Armed Forces (Special Powers) Act, 1958
of the Constitution. All such deployments should be only for a temporary
period not exceeding three months, which could be extended by another a. The Armed Forces (Special Powers) Act, 1958 should be repealed. To
three months after authorisation by Parliament. provide for an enabling legislation for deployment of Armed Forces of the
Union in the North-Eastern states of the country, the Unlawful Activities
b. The law should spell out the hierarchy of the civil administration which (Prevention) Act, 1967 should be amended by inserting a new Chapter
would supervise the Forces under such circumstances. VI A as recommended by the Committee to Review the Armed Forces
(Special Powers) Act, 1958. The new Chapter VI A would apply only to
the North-Eastern states.

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50. (Para 9.1.5) The Role of Civil Society Annexure-I

a. Citizens should be involved in evaluating the quality of service at police Details of Consultations carried out by the Administrative
stations and other police offices. Reforms Commission
b. Government should incentivise citizens’ initiatives.

c. Formal mechanisms should be set up at the cutting edge level to involve In order to ascertain the views from different stakeholders on matters concerning with
citizens/ citizen’s groups in various aspects of public order management. ‘Public Order’, the Commission organised a number of workshops and consultations.
51. (Para 9.2.7) The Role of the Media in Public Order The details of these workshops and consultations along with the list of participants and
summary of main recommendations emerging out of the discussions are given below. The
a. The Administration must make facts available to the media at the earliest Commission would like to place on record its gratitude to the organisations who assisted
about any major development, particularly activities affecting public in holding these workshops and consultations and the participants including members of
order. NGOs and human rights groups, serving and retired officers of Government of India and the
State Government officers whose views and suggestions have been of immense help to the
b. In order to have better appreciation of each other’s view points there should Commission in articulating its recommendations. The Commission is highly appreciative
be increased interaction between the Administration and the media. This of the reports furnished by these organisations, viz., Centre for Policy Research, New Delhi;
could be inter alia in the form of joint workshops and trainings. S.V.P. National Police Academy, Hyderabad and Commonwealth Human Rights Initiative,
New Delhi which contained valuable inputs. The Commission has utilized these inputs
c. The Administration should designate points of contact at appropriate levels in preparation of this report.
(a spokesperson) for the media which could be accessed during whenever
required. Sl.No. Workshop/Consultation Particulars Reference

d. Officers should be imparted training for interaction with the media. 1 Workshop on Public Order List of Participants Annexure-I(1)
organised jointly with Centre
e. A cell may be constituted at the district level which may analyse media for Policy Research, New Delhi Recommendations Annexure-I(2)
reports about matters of public importance. on 2nd-3rd February, 2006 made at the
Workshop

2 National Workshop on Public Speech of Chairman, Annexure-I(3)

Order organised jointly with ARC
S.V.P. National Police Academy, List of Participants Annexure-I(4)
Hyderabad on 11th-12th Recommendations Annexure-I(5)
March, 2006 made at the
Workshop

3 Roundtable on Policing and List of Participants Annexure-I(6)

Public Order organised jointly
with Commonwealth Human Recommendations Annexure-I(7)
Rights Initiative, New Delhi on made at the
10th June, 2006 Roundtable

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 13

THIRTEENTH REPORT

SECOND ADMINISTRATIVE REFORMS COMMISSION

ORGANISATIONAL STRUCTURE OF GOVERNMENT OF INDIA

ORGANISATIONAL STRUCTURE OF
GOVERNMENT OF INDIA

Second Administrative Reforms Commission

Government of India

2nd Floor, Vigyan Bhawan Annexe, Maulana Azad Road, New Delhi 110 011
e-mail : arcommission@nic.in website : http://arc.gov.in
APRIL 2009
 Organisational Structure of Government of India

a level playing field is achieved, the intervention of the Regulators could be

reduced in a phased manner ultimately leading either to their abolition or to
convergence with other Regulators. CONCLUSION
j. There is need to achieve greater uniformity in the structure of Regulators.
The existing coordination mechanisms such as the Committee of Secretaries/
Cabinet Committees, assisted by Secretary (Coordination) could easily ensure
that the institutional framework for all Regulators follow, by and large, a The Commission in this Report has examined the organizational structure and functioning
uniform pattern. of the Government of India with a view to making it more pro-active, responsive, accountable
and efficient. The Commission, has, therefore, attempted to redefine the role of various
Ministries/Departments in order to meet new and emerging challenges of governance which
necessitate a much greater degree of collaboration and coordination among them. Besides, the
Commission has analysed the procedures as well as the internal structures of different Ministries
and Departments with a view to make the Departments function in a more innovative and
effective manner.

The Commission recognizes that structural reforms are necessary but are not sufficient in
themselves to improve governance and, therefore, need to be complemented by a series of
other reform measures. The Commission has dealt with such measures in its other Reports. It
is essential that all these reform initiatives are implemented in a synchronized way to achieve
better governance.

Given the complexity and size of the Government of India as an organization, the Commission
has refrained from entering into finer details of the restructuring exercise and has confined itself
to laying down broad principles. It is expected that individual Ministries/Departments would
be able to apply these principles in order to substantially reorganize themselves. Similarly, in
case of several rules that govern the functioning of Government of India, the Commission has
suggested certain generic changes. It would be for the Ministries to apply these suggestions in
order to recast their rules so as to increase their efficacy. The reorganization needs to be driven
by the necessary political will at the highest level and monitored regularly by the Cabinet
Secretariat.

Some of suggestions made in the Report may look radical but it needs to be recognized
that implementing these, even in a phased manner, may be critical to achieving an effective
transparent, coherent and efficient governance structure.

158 159
 Summary of Recommendations

Coordinating (or First) Minister, other Cabinet Minister(s)/Minister(s) of

State.

SUMMARY OF RECOMMENDATIONS c. The structure of the Government of India should be rationalised by grouping
together closely related subjects as illustrated in paragraph 5.3.10.5 in order
to reduce the number of Ministries to 20-25.

4. (Para 5.4.6) Recasting the Allocation of Business Rules

1. (Para 4.2) Core Principles of Reforming the Structure of Government
a. There is need to recast the Allocation of Business Rules to make them more
a. The core principles mentioned in paragraph 4.1 should govern the restructuring focussed on the goals and outcomes of each Ministry/Department in order
of Government of India. to shift the emphasis from a detailed listing of activities/subjects of each
2. (Para 5.1.11) Rationalising the Functions of Government Ministry/Department to a broader perspective.

a. The Government of India should primarily focus on the core functions stated b. The Allocation of Business Rules should first provide a Statement of the
in paragraph 5.1.10. mission of the department followed by a list of subjects and functions.

b. Government at all levels should be guided by the principle of subsidiarity. c. There is need to bring greater uniformity in the description of the roles and
functions of various Ministries/Departments.
c. There is need to carry out a detailed analysis of the functions/activities in each
Ministry/Department in the light of (a) and (b) above. This should be followed d. Ministries/Departments should maintain a master list of all laws pertaining
by restructuring which may include decentralization/delegation or hiving off to the subjects dealt with in that Ministry/Department instead of mentioning
activities. them in the Allocation of Business Rules. The underlying principle should be
stated in the Rules that all laws relating to the subjects and functions allocated
3. (Para 5.3.11) Rationalising and Reorganising the Ministries and Departments to a Ministry/Department would fall under its purview.

a. The concept of a Ministry would have to be redefined. A Ministry would mean e. Instead of naming the individual PSUs and autonomous organizations under
a group of departments whose functions and subjects are closely related and each Ministry, the Rules should merely have a generic entry to the effect
is assigned to a First or Coordinating Minister for the purpose of providing that all PSUs and Autonomous Organizations whose functioning is directly
overall leadership and coordination. This concept of a Ministry and the related to subject(s) of the concerned Ministry would be under its jurisdiction.
Coordinating (or First) Minister may be explicitly laid down in the Allocation However, in cases where activities of a PSU or an autonomous organization
of Business Rules. Adequate delegation among the Ministers would have to relates to more than one Ministry/Department, then it may be advisable to
be laid down in the Transaction of Business Rules. As a consequence of this, list out such PSUs under a particular Ministry/Department.
rationalization of Secretary level posts wherever required may also need to be
carried out. 5. (Para 5.5.2.7) Focus on Policy Analysis

b. Individual departments or any combination of these could be headed by the a. In order to make them binding, the general principles to govern the extent
of delegation from Departments to their attached and subordinate offices

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 Organisational Structure of Government of India Summary of Recommendations

(executive agencies) may be incorporated in the Transaction of Business agency/board/special purpose body etc. that is to function as an executive
Rules. These principles may stipulate that the Ministries/Departments agency, must be autonomous or semi-autonomous and professionally
should concentrate on the following: managed under a mandate. Such executive agencies could be structured as a
department, board, commission, company, society etc.
i. Policy analysis, planning, policy making and strategic decisions
d. The right balance between autonomy and accountability needs to be struck
ii. Budgeting and Parliamentary work
while designing the institutional framework of executive agencies. This could
iii. Monitoring of implementation through systems and procedures be achieved through well designed performance agreements, Memorandum
of Understanding (MOU), contracts etc. However, preparing and enforcing
iv. Appointments of key personnel such performance contracts requires considerable upgradation of capacity in
the concerned government departments.
v. Coordination
8. (Para 5.9.7) Reorganisation of Ministries
vi. Evaluation
a. Each Department should lay down a detailed scheme of delegation at all
b. Attached and subordinate offices should serve as the executive agencies of the levels so that the decision making takes place at the most appropriate level. It
ministries and concentrate on the implementation of Government policies should be laid down in the Manual of Office Procedure that every Ministry
and programmes.
should prescribe a detailed scheme of delegation for its officers. This
6. (Para 5.5.3.3) Policy Evaluation delegation should be arrived at on the basis of an analysis of the activities and
functions of the Ministry/Department and the type of decisions that these
a. Each Department should introduce a system of policy evaluation to be carried entail which should be dovetailed with the decision making units identified
out at the end of prescribed periods. All relevant policies should be updated in that Department.
in the light of the findings of such evaluations.
b. The scheme of delegation should be updated periodically and should also
7. (Para 5.6.10) Creation of Effective Executive Agencies be ‘audited’ at regular intervals. The audit should ensure that the delegated
authority is actually exercised by the delegatee. The scheme of delegation
a. Each Union Government Ministry should scrutinize the functions/activities should be placed in the public domain.
of the ministry to confirm whether these activities/functions are critical to
the mission of the Department and can only be carried out by government c. The number of levels through which a file passes for a decision should not
agencies. This should be done with reference to core areas mentioned by the exceed three.
Commission in para 4.1.1.a.
i. In cases where the Minister’s approval is required, the file should be
b. Only those functions/activities that are in line with the principles enunciated initiated by the Deputy Secretary/Director concerned and should be
in paragraph 5.5.2.7 (a) should be carried out directly by the Department/ moved through the Joint Secretary (or Additional Secretary/Special
Ministries. Other functions/activities should be carried out by the executive Secretary) and the Secretary (or Special Secretary) to the Minister.
agencies of the department.
ii. Cases requiring approval of the Secretary should go through just two
c. Each agency, whether a new body or an existing departmental undertaking/ levels (e.g. either US and Director, US and JS or Director and JS).

162 163
 Organisational Structure of Government of India Summary of Recommendations

iii. Cases requiring approval of the JS/Director/DS should come through a. Setting up of a Regulator should be preceded by a detailed review to decide
just one level. The exact combination of levels should be spelt out in whether the policy regime in the concerned sector is such that a Regulator
the scheme of delegation for each Ministry/Department whereas the would be better placed to deliver the policy objectives of the department
number of levels as suggested above should be prescribed in the Manual concerned.
of Office Procedure.
b. In addition to the statutory framework which underpins the interface between
iv. The Department dealing with administrative reforms in the Union the government and the regulator, each Ministry/Department should evolve a
Government should be entrusted with the task of ensuring compliance ‘Management Statement’ outlining the objectives and roles of each regulator
with this stipulation. and the guidelines governing their interaction with the government. This would
guide both the government department and the Regulator.
d. For addressing cross cutting issues, the Secretary of the concerned Department
should have the flexibility to create inter-displinary teams. c. There is need for greater uniformity in the terms of appointment, tenure and
removal of various regulatory authorities considering these have been set up
e. The Manual of Office Procedure should be recast based on the principles with broadly similar objectives and functions and should enjoy the same degree
stated in paragraph 5.9. of autonomy. The initial process of appointment of Chairman and Board
Members should be transparent, credible and fair.
f. The Departments should build an electronic database of decisions that
are likely to be used as precedents. Thereafter such database should be d. The appointment of the Chairman and Board Members for all such regulatory
periodically reviewed and where necessary, changes in rules introduced in authorities should be done by the Union/State Governments after an initial
order to codify them. There may also be precedents that may be the result screening and recommendation of a panel of names by a Selection Committee.
of wrong or arbitrary decision making which the Department would prefer The composition of the Selection Committee should be defined in the
not to rely on for the future. In such cases the Department would have to respective Acts and may broadly follow the pattern laid down in the Electricity
appropriately change its policy/guidelines and if required even the rules to Regulatory Commission Act.
ensure that these precedents are not wrongly used. e. The tenure of the Chairmen and Board Members could also be made uniform
9. (Para 5.12) Coordination Mechanisms preferably three years or 65 years of age whichever is earlier.

f. Legal provisions regarding removal of Board Members should be made uniform

a. There is need to ensure that the existing coordination mechanisms like the
while at the same time ensuring sufficient safeguards against arbitrary removal.
Group of Ministers, and Committee of Secretaries function effectively and
This could be achieved by allowing removal by the Union Government only
help in early resolution of issues as stated in para 5.10 Selective, but effective
on fulfilment of certain conditions as laid down in Section 6 of the IRDA
use of GOMs with clear mandate and prescribed time limits, would be
Act with the additional safeguard that a removal for abuse of power shall be
helpful.
preceded by an enquiry and consultation with UPSC.
b. Unresolved issues concerning States which require inter-Ministerial
g. Parliamentary oversight of regulators should be ensured through the respective
coordination in Government of India, should be placed before the Committee Departmentally Related Standing Parliamentary Committees.
of Secretaries (COSs) and then to the Union Cabinet for resolution.
h. A body of reputed outside experts should propose guidelines for periodic
10. (Para 6.4.8) Creating an Effective Regulatory Framework

164 165
 Organisational Structure of Government of India

evaluation of the independent Regulators. Based on these guidelines, List of Reports Submitted by the
government in consultation with respective Departmentally related Standing Second Administrative Reforms Commission up to February 2009
Committee of the Parliament should fix the principles on which the
Regulators should be evaluated. The annual reports of the regulators should
include a report on their performance in the context of these principles. This 1. First Report: Right to Information: Master Key to Good Governance
report should be referred to the respective Parliamentary Committee for
discussion. 2. Second Report: Unlocking Human Capital: Entitlements and Governance –
A Case Study
i. Each statute creating a regulator should include a provision for an impact
assessment periodically by an external agency. Once the objective of creating 3. Third Report: Crisis Management: From Despair to Hope
a level playing field is achieved, the intervention of the Regulators could be
reduced in a phased manner ultimately leading either to their abolition or to 4. Fourth Report: Ethics in Governance
convergence with other Regulators.
5. Fifth Report: Public Order – Justice for All . . . Peace for All
j. There is need to achieve greater uniformity in the structure of Regulators.
The existing coordination mechanisms such as the Committee of Secretaries/ 6. Sixth Report: Local Governance – An Inspiring Journey into the Future
Cabinet Committees, assisted by Secretary (Coordination) could easily ensure
that the institutional framework for all Regulators follow, by and large, a 7. Seventh Report: Capacity Building for Conflict Resolution – Friction to
uniform pattern. Fusion

8. Eighth Report: Combatting Terrorism – Protecting by Righteousness

9. Ninth Report: Social Capital – A Shared Destiny

10. Tenth Report: Refurbishing of Personnel Administration – Scaling New

Heights

11. Eleventh Report: Promoting e-Governance – The SMART Way Forward

12. Twelfth Report: Citizen Centric Administration – The Heart of Governance

166 167
 GOVERNMENT OF INDIA CONCLUSION

Democratic governance and citizen sovereignty are the bedrock of our Constitution.
Democracy flourishes and citizens get the fruits of good governance only when most
decisions are taken closest to the people. Such a people-centred governance process not
only enhances participation and legitimacy of our political system, but also ensures greater
effectiveness in delivery of services and accountable governance. A democracy matures only
when the link between the vote and public good is firmly established in the citizens’ mind.
People would be willing to pay taxes only when the tax money is deployed for better services
SECOND ADMINISTRATIVE REFORMS COMMISSION in the locality in a manner that the tax-payer appreciates where the public money is going.
Unless authority at each level matches the responsibility, we will continue to preside over
a dysfunctional system of alibis, and citizens will continue to be disenchanted with our
democratic process. This report and the Commission’s recommendations are based on this
clear and unambiguous logic of democracy, legitimacy and efficacy.

Three basic issues need to be addressed while empowering local governments. First,
democratic institutions need careful nurturing, abundant patience, and institutional designs
that maximise the benefits and ensure constant self-correction. Second, transfer of power
in any form is painful and difficult. Local governments are only now taking roots after 60
SIXTH REPORT years of independence. As state governments have come into their own over the decades,
there is a natural tendency to hold on to their turf, and resist empowerment of local
governments. Giving up power is never easy, and is unsually resisted. The states should
therefore be enabled to discover a new and vital role, even as local governments become
stronger and more vibrant. In some ways, the union government discovered such a role
in respect of the states over the past two decades. Political, economic and legal changes
completed transformed the union’s role vis-à-vis states, and yet while union control has
declined, its leadership and coordination role are more important than ever before. Such
a transformation in the role of states vis-à-vis local governments is critical. Third, local
LOCAL GOVERNANCE government empowerment must ensure continuity and accountability. There cannot be a
An inspiring journey into the future wholesale extinction of existing institutions and negation of current practices overnight. A
careful transition and utilisation of the strengths of the present arrangements are important.
Equally, decentralised power should lead to greater efficacy and accountability, not merely
decentralised corruption and harassment.

The Commission has attempted to balance all these considerations while making its
recommendations. All democratic transformation is based on continuity and change.
We believe India is ready for a fundamental governance transformation, and empowered,
citizen-centric, accountable local governments are at the heart of this transformation. We
OCTOBER 2007
310
 Summary of Recommendations Local Governance

are confident that within the next decade Indian democracy will mature to a point where
most decisions affecting citizens’ lives will be taken at the grass root level in stakeholders’
groups and local governments; citizens will have a direct and effective role in managing the
affairs of the collective; and service delivery and day-to-day governance will be effective, fair
and transparent. This Report gives practical shape to this vision, and the recommendations SUMMARY OF RECOMMENDATIONS
of the Commission should be viewed holistically in pursuit of this vision.

1. (Para 3.1.1.12) The Principle of Subsidiarity

a. Article 243 G should be amended as follows:

“Subject to the provisions of this Constitution, the Legislature of a State
shall, by law, vest a Panchayat at the appropriate level with such powers
and authority as are necessary to enable them to function as institutions
of self government in respect of all functions which can be performed at
the local level including the functions in respect of the matters listed in
the Eleventh Schedule”.

b. Article 243 W should be similarly amended to empower urban local

bodies.

2. (Para 3.1.2.4) Strengthening the Voice of Local Bodies

a. Parliament may by law provide for constitution of a Legislative Council

in each State, consisting of members elected by the local governments.

3. (Para 3.1.3.11) Structure of Local Bodies

a. Article 243B(1) should be amended to read as follows:

“There shall be constituted in every State, as the State Legislature may
by law provide, Panchayats at appropriate levels in accordance with the
provisions of this part”.

b. The Constitutional provisions relating to reservation of seats (Article 243

D) must be retained in the current form to ensure adequate representation
to the under-privileged sections and women.

c. Members of Parliament and State Legislatures should not become members

of local bodies.

d. Article 243 C(1) should be retained.

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e. Article 243 C (2 & 3) should be repealed and supplanted by Article 243 c. The Registration of Electors Rules, 1960, should be amended to define a
C(2) as follows: ‘Part’ as a compact geographical unit.

243 C(2) Subject to the provisions of this part, the Legislature of a State may, d. In order to achieve convergence between census data and electoral rolls,
by law, make provisions with respect to composition of Panchayats and the the boundaries of a ‘Part’ and an ‘Enumeration Block’ should coincide.
manner of elections provided that in any tier there shall be direct election
of at least one of the two offices of Chairperson or members. e. Reservation of seats should follow any one of the two principles mentioned
below:
Provided that in case of direct elections of members in any tier, the ratio
between the population of the territorial area of a Panchayat at any level i. In case of single-member constituencies, the rotation can be after at
and the number of seats in such Panchayat to be filled by election shall, so least 2 terms of 5 years each so that there is possibility of longevity
far as practicable, be the same throughout the State. Also, each Panchayat of leadership and nurturing of constituencies.
area shall be divided into territorial constituencies in such manner that
ii. Instead of single-member constituencies, elections can be held
the ratio between the population of each constituency and the number of
to multi-member constituencies by the List System, ensuring the
seats allotted to it shall, so far as practicable, be the same throughout the
reservation of seats. This will obviate the need for rotation thus
Panchayat area.
guaranteeing allocation of seats for the reserved categories.
f. There shall be a District Council in every district with representation from
f. The conduct of elections for the elected members of District and
both urban and rural areas.
Metropolitan Planning Committees should be entrusted to the State
g. 243 B (2) should be substituted by: Election Commission.

“There shall be constituted in every District, a District Council representing 5. (Para 3.2.2.6) Constitution of the State Election Commission
all rural and urban areas in the District and exercising powers and functions
a. The State Election Commissioner should be appointed by the Governor on
in accordance with the provisions of Articles 243 G and 243 W of the
the recommendation of a collegium, comprising the Chief Minister, the
Constitution.”
Speaker of the State Legislative Assembly and the Leader of Opposition
4. (Para 3.2.1.12) The Electoral Process in the Legislative Assembly.

a. The task of delimitation and reservation of constituencies should be b. An institutional mechanism should be created to bring the Election
entrusted to the State Election Commissions (SECs); Commission of India and the SECs on a common platform for coordination,
learning from each other’s experiences and sharing of resources.
b. Local government laws in all States should provide for adoption of the
Assembly electoral rolls for local governments without any revision of 6. (Para 3.2.3.4) Correcting the Urban Rural Imbalance in Reperesentation in
names by SECs. For such a process to be effective it is necessary to ensure Legislative Bodies
that the voter registration and preparation of electoral rolls by Election
a. In order to set right the electoral imbalance between the urban and rural
Commission of India is based on geographic contiguity. Similarly the
population in view of rapid urbanisation, an adjustment of the territorial
electoral divisions for elections to local bodies should follow the Building
constituencies - both for the Lok Sabha and the Legislative Assembly
Blocks approach;
– within a State should be carried out after each census. Articles 81, 82,
170, 330 and 332 of the Constitution would need to be amended.
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7. (Para 3.3.1.7) Devolution of Powers and Responsibilities • Principle of Subsidiarity

• Democratic Decentralisation
a. There should be clear delineation of functions for each level of local • Delineation of Functions
government in the case of each subject matter law. This is not a one-time • Devolution in Real Terms
exercise and has to be done continuously while working out locally relevant • Convergence
socio-economic programmes, restructuring organisations and framing • Citizen Centricity
subject-matter laws.
9. (Para 3.5.2.18) The State Finance Commission (SFC)
b. Each subject-matter law, which has functional elements that are best
attended to at local levels, should have provision for appropriate devolution a. This Commission endorses and reiterates the views of the Twelfth Finance
to such levels – either in the law or in subordinate legislation. All the Commission regarding the working of the SFCs as listed in paragraph
relevant Union and State laws have to be reviewed urgently and suitably 3.5.2.8.
amended.
b. Article 243 I (1)of the Constitution should be amended to include the
c. In the case of new laws, it will be advisable to add a ‘local government phrase “at such earlier time” after the words “every fifth year”.
memorandum’ (on the analogy of financial memorandum and memorandum
of subordinate legislation) indicating whether any functions to be attended c. Each State should prescribe through an Act, the qualifications of persons
to by local governments are involved and if so, whether this has been eligible to be appointed as Members of the State Finance Commission.
provided for in the law.
d. SFCs should evolve objective and transparent norms for devolution and
d. In case of urban local bodies, in addition to the functions listed in distribution of funds. The norms should include area-wise indices for
the Twelfth Schedule, the following should be devolved to urban local backwardness. State Finance Commissions should link the devolution of
bodies: funds to the level/quality of civic amenities that the citizens could expect.
This could then form the basis of an impact evaluation.
 School education;
 Public health, including community health centres/area hospitals; e. The Action Taken Report on the recommendations of the SFC must
 Traffic management and civic policing activities; compulsorily be placed in the concerned State Legislature within six
 Urban environment management and heritage; and months of submission and followed with an annual statement on the
 Land management, including registration. devolution made and grants given to individual local bodies and the
implementation of other recommendations through an appendix to the
These, however, are only illustrative additional functions and more such functions State budget documents.
could be devolved to urban local bodies by the respective States.
f. Incentives can be built into devolution from the Union to the States to take
8. (Para 3.4.20) Framework Law for Local Bodies care of the need to improve devolution from the States to the third tier of
governments.
a. Government of India should draft and place before Parliament, a
Framework Law for local governments. The Framework Law could be g. Common formats, as recommended by the Twelfth Finance Commission
enacted under Article 252 of the Constitution on the lines of the South (TFC) must be adopted, and annual accounts and other data must be
African Act, for the States to adopt. This Law should lay down the broad compiled and updated for use by the SFCs.
principles of devolution of powers, responsibilities and functions to the
local governments and communities, based on the following:
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h. SFCs should carry out a more thorough analysis of the finances of local and general management. This should be ensured by the nodal agencies
bodies and make concrete recommendations for improvements in their in State Governments.
working. In case of smaller local bodies such recommendations could be
broad in nature, but in case of larger local bodies, recommendations should d. As an aid to capacity building, suitable schemes need to be drawn up under
be more specific. With historical data being available with the SFC, and State Plans for Rural and Urban Development for documentations of case
with the improvement in efficiency of data collection, the SFC would be studies, best practices and evaluation with reference to the performance of
in a position to carry out the required detailed analysis. The special needs the prescribed duties and responsibilities of such bodies.
of large urban agglomerations particularly the Metropolitan cities should
e. Training of elected representatives and personnel should be regarded
be specially addressed by the SFC.
as a continuing activity. Expenditure requirement on training may be
i. SFCs should evolve norms for staffing of local bodies. taken into account by the State Finance Commissions while making
recommendations.
j. It is necessary that a mechanism be put in place which reviews the
implementation of all the recommendations of the SFCs. If considered f. Academic research has a definite role to play in building long-term strategic
necessary, devolution of funds could be made conditional to local bodies institutional capacity for greater public good. Organisations like the Indian
agreeing to implement the recommendations of the SFCs. Council of Social Science Research must be encouraged to fund theoretical,
applied and action research on various aspects of the functioning of local
10. (Para 3.6.16) Capacity Building for Self Governance bodies.

a. Capacity building efforts in rural and urban local self governing institutions g. A pool of experts and specialists (e.g. engineers, planners etc.) could be
must attend to both the organisation building requirements as also the maintained by a federation/consortium of local bodies. This common pool
professional and skills upgradation of individuals associated with these could be then accessed by the local bodies whenever required for specific
bodies, whether elected or appointed. Relevant Panchayat and Municipal tasks.
legislations and manuals framed thereunder must contain clear enabling
provisions in this respect. There should be special capacity building 11. (Para 3.7.5.6) Decentralised Planning
programmes for women members.
a. A District Council should be constituted in all districts with representation
b. State Governments should encourage local bodies to outsource specific from rural and urban areas. It should be empowered to exercise the
functions to public or private agencies, as may be appropriate, through powers and functions in accordance with Articles 243 G and 243 W of
enabling guidelines and support. Outsourcing of activities should be the Constitution. In that event, the DPCs will either not exist or become,
backed by development of in-house capacity for monitoring and oversight at best, an advisory arm of the District Council. Article 243 (d) of the
of outsourced activities. Likewise, transparent and fair procurement Constitution should be amended to facilitate this.
procedures need to be put in place by the State Government to improve
b. In the interim and in accordance with the present constitutional scheme,
fiscal discipline and probity in the local bodies.
DPCs should be constituted in all States within three months of completion
c. Comprehensive and holistic training requires expertise and resources of elections to local bodies and should become the sole planning body for
from various subject matter specific training institutes. This can be best the district. The DPC should be assisted by a planning office with a full
achieved by ‘networking’ of institutions concerned with various subjects time District Planning Officer.
such as financial management, rural development, disaster management

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c. For urban districts where town planning functions are being done by MPC constituted for the same which may be deemed to be a DPC for such
Development Authorities, these authorities should become the technical/ areas. As such an area will usually cover more than one district, DPCs for
planning arms of the DPCs and ultimately of the District Council. those districts should not be constituted (or their jurisdictions may be
limited to the rural portion of the revenue district concerned).The MPCs
d. A dedicated centre in every district should be set up to provide inputs to should be asked to draw up a Master Plan/CDP for the entire metropolitan
the local bodies for preparations of plans. A two-way flow of information area including the peri-urban areas.
between different levels of government may also be ensured.
c. The planning departments of the Development Authorities (DAs) should
e. The guidelines issued by the Planning Commission pertaining to the be merged with the DPCs and MPCs who will prepare the master plans
preparation of the plan for the district and the recommendations of the and zonal plans.
Expert Group regarding the planning process at the district level should
be strictly implemented. d. The task of enforcement and regulation of the master plans/CDPs drawn
up by the MPCs should be the specific statutory responsibility of all the
f. Each State Government should develop the methodology of participatory local bodies falling within the extended metropolitan region concerned.
local level planning and provide such support as is necessary to
institutionalise a regime of decentralised planning. e. The monopoly role of Development Authorities (DAs) in development
of land for urban uses, wherever it exists, should be done way with.
g. States may design a planning calendar prescribing the time limits within However, public agencies should continue to play a major role in
which each local body has to finalise its plan and send it to the next development of critical city level infrastructure as well as low cost housing
higher level, to facilitate the preparation of a comprehensive plan for the for the poor. For this purpose, the engineering and land management
district. departments of the DAs should be merged with the concerned
Municipality/Corporation.
h. State Planning Boards should ensure that the district plans are integrated
with the State plans that are prepared by them. It should be made mandatory 12. (Para 3.8.6) Accountability and Transparency
for the States to prepare their development plans only after consolidating
the plans of the local bodies. The National Planning Commission has to a. Audit committees may be constituted by the State Governments at the
take the initiative in institutionalising this process. district level to exercise oversight regarding the integrity of financial
information, adequacy of internal controls, compliance with the applicable
(Para 3.7.6.2.4) laws and ethical conduct of all persons involved in local bodies. These
committees must have independence, access to all information, ability
a. The function of planning for urban areas has to be clearly demarcated
to communicate with technical experts, and accountability to the public.
among the local bodies and planning committees. The local bodies should
For Metropolitan Corporations, separate audit committees should be
be responsible for plans at the layout level. The DPCs/District Councils
constituted. Once the District Councils come into existence, a special
– when constituted – and MPCs should be responsible for preparation
committee of the District Council may examine the audit reports and other
of regional and zonal plans. The level of public consultation should be
financial statements of the local bodies within the district. Such committee
enhanced at each level.
may also be authorised to fix responsibility for financial lapses. In respect
b. For metropolitan areas, the total area likely to be urbanised (the extended of the audit reports of the District Council itself, a special committee of
metropolitan region) should be assessed by the State Government and an the Legislative Council may discharge a similar function.

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b. There should be a separate Standing Committee of the State Legislature for disqualification of membership, the authority to investigate should lie
the local Bodies. This Committee may function in the manner of a Public with the State Election Commission who shall send its recommendations
Accounts Committee. to the Governor of the State.

c. A local body Ombudsman should be constituted on the lines suggested e. In the hierarchy of functionaries under the control of local bodies, functions
below. The respective State Panchayat Acts and the Urban local Bodies should be delegated to the lowest appropriate functionary in order to
Acts should be amended to include provisions pertaining to the local body facilitate access to citizens.
Ombudsman.
f. Each local body should have an in-house mechanism for redressal of
i. Local body Ombudsman should be constituted for a group of districts grievances with set norms for attending and responding to citizens’
to look into complaints of corruption and maladministration against grievances.
functionaries of local bodies, both elected members and officials. For
this, the term ‘Public Servant’ should be defined appropriately in the g. For establishing robust social audit norms, every State Government must
respective State legislations. take immediate steps to implement the action points suggested in para
5.9.5 of the Report of the Expert Group on ‘Planning at the Grass roots
ii. Local body Ombudsman should be a single member body appointed Level’.
by a Committee consisting of the Chief Minister of the State, the
Speaker of the State Legislative Assembly and the Leader of the h. It should be ensured that suo motu disclosures under the Right to
Opposition in the Legislative Assembly. The Ombudsman should Information Act, 2005 should not be confined to the seventeen items
be selected from a panel of eminent persons of impeccable integrity provided in Section 4(1) of that Act but other subjects where public interest
and should not be a serving government official. exists should also be covered.

iii. The Ombudsman should have the authority to investigate cases i. A suitable mechanism to evolve a system of benchmarking on the basis of
and submit reports to competent authorities for taking action. identified performance indicators may be adopted by each State. Assistance
In case of complaints and grievances regarding corruption and of independent professional evaluators may be availed in this regard.
maladministration against local bodies in general and its elected
j. Evaluation tools for assessing the performance of local bodies should be
functionaries, the local body Ombudsman should send its report
devised wherein citizens should have a say in the evaluation. Tools such
to the Lokayukta who shall forward it to the Governor of the
as ‘Citizens’ Report Cards’ may be introduced to incorporate a feedback
State with its recommendations. In case of disagreement with the
mechanism regarding performance of local bodies.
recommendations of the Ombudsman, the reasons must be placed
in the public domain. 13. (Para 3.9.22) Accounting and Audit
iv. In case of a Metropolitan Corporations, a separate Ombudsman a. The accounting system for the urban local bodies (ULBs) as provided in
should be constituted. the National Municipal Accounts Manual (NMAM) should be adopted by
the State Governments.
v. Time limits may be prescribed for the Ombudsman to complete its
investigations into complaints. b. The financial statements and balance sheet of the urban local bodies
should be audited by an Auditor in the manner prescribed for audit
d. In case of complaints and grievances related to infringement of the
law governing elections to these local bodies, leading to suspension/
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of Government Companies under the Companies Act, 1956 with j. The system of outcome auditing should be gradually introduced. For this
the difference that in the case of audit of these local bodies, the purpose the key indicators of performance in respect of a government
C&AG should prescribe guidelines for empanelment of the Chartered scheme will need to be decided and announced in advance.
Accountants and the selection can be made by the State Governments
within these guidelines. The audit to be done by the Local Fund Audit k. To complement institutional audit arrangements, adoption and monitoring
or the C&AG in discharge of their responsibilities would be in addition of prudent financial management practices in the local bodies should be
to such an audit. institutionalised by the State Governments by legislating an appropriate
law on Fiscal Responsibility for local Bodies.
c. The existing arrangement between the Comptroller & Auditor General
of India and the State Governments with regard to providing Technical 14. (Para 3.10.1.2) Information and Communication Technology
Guidance and Supervision (TGS) over maintenance of accounts and audit
a. Information and Communication Technology should be utilised by the
of PRIs and ULBs should be institutionalised by making provisions in the
local governments in process simplification, enhancing transparency
State Laws governing local bodies.
and accountability and providing delivery of services through single
d. It should be ensured that the audit and accounting standards and formats window.
for Panchayats are prepared in a way which is simple and comprehensible
15. (Para 3.10.2.8) Space Technology
to the elected representatives of the PRIs.
a. Space technology should be harnessed by the local bodies to create an
e. The independence of the Director, Local Fund Audit (DLFA) or any
information base and for providing services.
other agency responsible for audit of accounts of local bodies should
be institutionalised by making the office independent of the State b. Local governments should become one point service centres for providing
administration. The head of this body should be appointed by the State various web based and satellite based services. This would however require
Government from a panel vetted by the C&AG. capacity building in the local governments.
f. Release of Finance Commission Grants to the local bodies may be made 16. (Para 4.1.3.5) Size of the Gram Panchayat
conditional on acceptance of arrangements regarding technical supervision
of the C&AG over audit of accounts of local bodies. a. States should ensure that as far as possible Gram Panchayats should be of
an appropriate size which would make them viable units of self-governance
g. Audit reports on local bodies should be placed before the State Legislature and also enable effective popular participation. This exercise will need to
and these reports should be discussed by a separate committee of the State take into account local geographical and demographic conditions.
Legislature on the same lines as the Public Accounts Committee (PAC).
17. (Para 4.1.4.4) Ward Sabha - its Necessity
h. Access to relevant information/records to DLFA/designated authority for
conducting audit or the C&AG should be ensured by incorporating suitable a. Wherever there are large Gram Panchayats, States should take steps to
provisions in the State Laws governing local bodies. constitute Ward Sabhas which will exercise in such Panchayats, certain
powers and functions of the Gram Sabha and of the Gram Panchayat as
i. Each State may ensure that the local bodies have adequate capacity to match may be entrusted to them.
with the standards of accounting and auditing.

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18. (Para 4.1.5.4) Personnel Management in PRIs e. In all cases of disagreements with the recommendations made by the local
Ombudsman/Lokayukta, the reasons will need to be placed in the public
a. Panchayats should have power to recruit personnel and to regulate their domain.
service conditions subject to such laws and standards as laid down by
the State Government. Evolution of this system should not be prolonged 20. (Para 4.1.7.8) Position of Parastatals
beyond three years. Until then, the Panchayats may draw upon, for defined
periods, staff from departments/agencies of the State Government, on a. Parastatals should not be allowed to undermine the authority of the
deputation. PRIs.

b. In all States, a detailed review of the staffing pattern and systems, with a b. There is no need for continuation of the District Rural Development
zero-based approach to PRI staffing, may be undertaken over the next one Agency (DRDA). Following the lead taken by Kerala, Karnataka and
year in order to implement the policy of PRI ownership of staff. The Zila West Bengal, the DRDAs in other States also should be merged with the
Parishads, particularly, should be associated with this exercise. respective District Panchayats (Zila Parishad). Similar action should be
taken for the District Water and Sanitation Committee (DWSC).
19. (Para 4.1.6.8) PRIs and the State Government
c. The District Health Society (DHS) and FFDA should be restructured to
a. The provisions in some State Acts regarding approval of the budget of have an organic relationship with the PRIs.
a Panchayat by the higher tier or any other State authority should be
abolished. d. The Union and State Governments should normally not setup special
committees outside the PRIs. However, if such specialised committees are
b. State Governments should not have the power to suspend or rescind required to be set-up because of professional or technical requirements,
any resolution passed by the PRIs or take action against the elected and if their activities coincide with those listed in the Eleventh Schedule,
representatives on the ground of abuse of office, corruption etc. or to they should, either function under the overall supervision and guidance
supersede/ dissolve the Panchayats. In all such cases, the powers to of the Panchayats or their relationship with the PRIs should be worked
investigate and recommend action should lie with the local Ombudsman out in consultation with the concerned level of Panchayat.
who will send his report through the Lokayukta to the Governor.
e. Community level bodies should not be created by decisions taken at higher
c. For election infringements and other election related complaints, the levels. If considered necessary the initiative for their creation should come
authority to investigate should be the State Election Commission who will from below and they should be accountable to PRIs.
send its recommendations to the Governor.
21. (Para 4.2.3.10) Activity Mapping
d. If, on any occasion, the State Government feels that there is need to take
immediate action against the Panchayats or their elected representatives a. States must undertake comprehensive activity mapping with regard to
on one or more of the grounds mentioned in ‘b’ above, it should place the all the matters mentioned in the Eleventh Schedule. This process should
records before the Ombudsman for urgent investigation. In all such cases, cover all aspects of the subject viz; planning, budgeting and provisioning
the Ombudsman will send his report through Lokayukta to the Governor of finances. The State Government should set-up a task force to complete
in a specified period. this work within one year.

b. The Union Government will also need to take similar action with regard
to Centrally Sponsored Schemes.

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22. (Para 4.2.4.2) Devolving Regulatory Functions to the Panchayats h. State Governments should consider empowering the PRIs to collect cess
on the royalty from mining activities. In addition they should also be
a. Rural policing, enforcement of building byelaws, issue of birth, death, given power to impose and collect additional/special surcharge from such
caste and residence certificates, issue of voter identity cards, enforcement of activities (mines/minerals/plants).
regulations pertaining to weights and measures are some of the regulatory
functions which should be entrusted to Panchayats. Panchayats may also i. Innovative steps taken by the States and the PRIs to augment their resources
be empowered to manage small endowments and charities. This could be must be rewarded by linking Central Finance Commission and State
done by suitably modifying the laws relating to charitable endowments. Finance Commission grants to such measures. States may reward better
performing PRIs through special incentives.
b. Regulatory functions which can be performed by the Panchayats should
be identified and devolved on a continuous basis. j. In the tax domain assigned to PRIs, Village Panchayats must have
primary authority over taxation. However, where such taxation has inter-
23. (Para 4.3.5.3) Resource Generation by the Panchayats Panchayat remifications, the local government institutions at higher levels
- Intermediate Panchayat and Zila parishad could be given concurrent
a. A comprehensive exercise needs to be taken up regarding broadening and
powers subject to a ceiling. Whenever a tax/fee is imposed by the higher
deepening of the revenue base of local governments. This exercise will have
tier, such taxes should be collected by the concerned Village Panchayats.
to simultaneously look into four major aspects of resource mobilisation viz.
(i) potential for taxation (ii) fixation of realistic tax rates (iii) widening of 24. (Para 4.3.7.5) Transfer of Funds to the Panchayats
tax base and (iv) improved collection. Government may incorporate this
as one of the terms of reference of the Thirteenth Finance Commission. a. Except for the specifically tied, major Centrally Sponsored Schemes and
special purpose programmes of the States, all other allocations to the
b. All common property resources vested in the Village Panchayats should be Panchayati Raj Institutions should be in the form of untied funds. The
identified, listed and made productive for revenue generation. allocation order should contain only a brief description of broad objectives
and expected outcomes.
c. State Governments should by law expand the tax domain of Panchayats.
Simultaneously it should be made obligatory for the Panchayats to levy b. State Governments should modify their rules of financial business to
taxes in this tax domain. incorporate the system of separate State and District sector budgets, the
later indicating district-wise allocations.
d. At the higher level, the local bodies could be encouraged to run/ manage
utilities such as transport, water supply and power distribution on a sound c. There should be a separate Panchayat sector line in the State budget.
financial basis and viability.
d. State Governments should make use of the software on “fund transfer to
e. The expanded tax domain could interalia include levies on registration of Panchayats” prepared by the Union Panchayati Raj Ministry for speedy
cattle, restaurants, large shops, hotels, cybercafés and tourist buses etc. transfer of funds.
f. The role of State Governments should be limited to prescribing a band of e. State Governments should release funds to the Panchayats in such a manner
rates for these taxes and levies. that these institutions get adequate time to use the allocation during
the year itself. The fund release could be in the form of equally spaced
g. PRIs should be given a substantial share in the royalty from minerals
instalments. It could be done in two instalments; one at the beginning of
collected by the State Government. This aspect should be considered by
the financial year and the other by the end of September of that year.
the SFCs while recommending grants to the PRIs.
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25. (Para 4.3.8.2) PRIs and Access to Credit committee should be formed to support these activities. This Centre
committee should be only a deliberative body with responsibility
a. For their infrastructure needs, the Panchayats should be encouraged to to provide regular feedback to the Gram Sabha/Ward Sabha and be
borrow from banks/financial institutions. The role of the State Government accountable to it.
should remain confined only to fixing the limits of borrowing.
c. The Ministry sanctioning the programme should issue only broad
26. (Para 4.3.9.5) Local Area Development Schemes guidelines leaving scope for implementational flexibility so as to ensure
local relevance through active involvement of the Panchayats.
a. The flow of funds for all public development schemes in rural areas should
be exclusively routed through Panchayats. Local Area Development d. All Centrally Sponsored programmes should have properly demarcated
Authorities, Regional Development Boards and other organization having goals and there should be a mechanism to assess their socio-economic
similar functions should immediately be wound up and their functions impact over a given period of time. The NSSO may be suitably strengthened
and assets transferred to the appropriate level of the Panchayat. and assigned this task.
b. As recommended by the Commission in its report on “Ethics in Governance”, 28. (Para 4.4.8.6) Information, Education and Communication - IEC
the Commission reiterates that the schemes of MPLAD and MLALAD
should be abolished. a. A multi-pronged approach using different modes of communication like
the print media, the visual media, electronic media, folk art and plays
27. (Para 4.4.7) Rural Development etc. should be adopted to disseminate information and create awareness
about Panchayati Raj. It should be ensured that there is a convergence in
a. The Commission while endorsing the views of the Expert Group on
approach to achieve synergies and maximise reach.
Planning at the Grass roots Level as given at Annexure-IV(2) to this Report,
recommends that there has to be territorial/ jurisdictional/functional b. The Union Ministry of Information and Broadcasting should devise a
convergence in implementing Centrally Sponsored Schemes. mechanism in consultation with the Union Ministry of Panchayati Raj,
Ministry of Rural Development and Ministry of Agriculture and other
b. The centrality of PRIs in these schemes must be ensured if they are to deal
concerned Ministries for effectively implementing this activity.
with the matters listed in the Eleventh Schedule.
c. Rural broadcasting should become a full-fledged independent activity of the
(i) In all such schemes, the Gram/Ward Sabha should be accepted as the
All India Radio. Rural broadcasting units should be based in the districts
most important/cutting edge participatory body for implementation,
and the broadcasts should be primarily in the local language(s) prevalent in
monitoring and audit of the programmes.
the district. These programmes should focus on issues related to Panchayati
(ii) Programme committees dealing with functions under the Eleventh Raj Institutions, rural development, agriculture, Right to Information and
Schedule and working exclusively in rural areas need to be subsumed relevant ones on public health, sanitation, education etc.
by the respective panchayats and their standing bodies. Some others
29. (Para 4.5.4) Rule of Panchayats in Delivery of Services
having wider roles may need to be restructured to have an organic
relationship with the Panchayats. a. In terms of the Eleventh Schedule of the Constitution, local level activities of
elementary education, preventive and promotive health care, water supply,
(iii) In the programmes, where the activities percolate to areas and
sanitation, environmental improvement and nutrition should immediately
habitations below a Panchayat/Ward level, a small local centre
be transferred to the appropriate tiers of the PRIs.

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b. State Governments need to prepare an overarching Service Delivery Policy c. Each State should constitute a group to look into strengthening of the
outlining the framework within which each department could lay down administrative machinery in Fifth Schedule areas. This group will need to
detailed guidelines for preparation of Service Delivery Plans. go into the issues of (i) special administrative arrangements, (ii) provision
of hardship pay, (iii) other incentives, and (iv) preferential treatment in
30. (Para 4.5.5.6) Resource Centre at the Village Level accommodation and education. All expenditure in this regard should be
treated as charged expenditure under Article 275 of the Constitution.
a. Steps should be taken to set up Information and Communication
Technology (ICT) and space Technology enabled Resource Centres at the 33. (Para 4.6.1.5.3) Effictive Implementation of the Tribal Sub-Plan (TSP)
Village and Intermediate Panchayat levels for local resource mapping and
generation of local information base. a. Keeping in view the inadequacy of the past efforts, State Governments
should form a special planning unit (consisting of professionals and
b. These Resource Centres should also be used for documenting local technically qualified personnel) to prepare their Tribal-Sub Plan.
traditional knowledge and heritage.
b. A certain portion of the allocation under TSP should be made non-lapsable
c. Capacity building should be attempted at the local level by shifting on the pattern of the Non Lapsable Central Pool of Resources (NLCPR)
the currently available post school generalistic education to a skill and created for the North-Eastern States. A special cell may be set up in the
technology based system having focus on farm & animal husbandry Ministry of Tribal Affairs to monitor expenditure from this fund.
practices, computer applications, commercial cropping and soil and water
management. c) The government may consider preparing an impact assessment report every
year with respect to the States covered under PESA. This exercise may be
31. (Para 4.6.1.2.3) Local Government in the Fifth Schedule Areas assigned to a national level institute which has done similar work in the
past e.g. National Council for Applied Economic Research (NCAER),
a) The Union and State legislations that impinge on provisions of PESA should
National Institute of Public Finance and Policy (NIPFP), National Sample
be immediately modified so as to bring them in conformity with the Act.
Survey Organisation (NSSO) or some other suitable agency. This agency
b) If any State exhibits reluctance in implementing the provisions of PESA, will rate the performance of the State on predetermined indices.
Government of India may consider issuing specific directions to it in
34. (Para 5.1.4) Urbanisation and Growth
accordance with the powers given to it under Proviso 3 of Part A of the
Fifth Schedule. a. A new National Commission on Urbanisation should be constituted by
Government to suggest measures to deal with the rapid urbanisation,
32. (Para 4.6.1.4.4) Effective Implementation of PESA
including the large cities and bring about more balanced and efficient
a. Regular Annual Reports from the Governor of every State as stipulated urbanisation in the country.
under the Fifth Schedule, Part A (3) of the Constitution must be given due
35. (Para 5.2.2.4) Proposed Basic Structure - Ward Committees and Area Sabhas
importance. Such reports should be published immediately and placed in
the public domain. a. Government may consider the adoption of a common categorisation of
urban bodies across the country to improve clarity in their definition
b. In order to ensure that women are not marginalised in meetings of the Gram
so as to assist a systematic planning process and devolution of funds.
Sabha, there should be a provision in the PESA Rules and Guidelines that
A categorisation on the lines proposed given in Table 5.6 could be
the quorum of a Gram Sabha meeting will be acceptable only when out of
adopted.
the members present, at least thirty-three per cent are women.
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b. There should be three tiers of administration in urban local governments, followed. Broadly, the Area Sabha should perform functions similar to the
except in the case of Town Panchayats, where the middle level would not Gram Sabha such as prioritising developmental activities and identifying
be required. The tiers should be: beneficiaries under various schemes; and

i. Municipal Council/Corporation (by whatever name it is called); j. A process of activity mapping similar to the one taken up for PRIs should
be carried out for all ULBs within one year.
ii. Ward Committees; and
36. (Para 5.2.3.2) Zonal System for Large Cities
iii. Area Committees or Sabhas.
a. Zonal offices with all administrative powers delegated to them may be set
c. Each Area Sabha comprising all citizens in one or two (or more) polling up immediately in Metropolitan Corporations and Municipal Corporations
station areas, should elect, once in five years, a small Committee of and become the main point of contact for people in respect of services
Representatives. The Committee of Representatives would elect one person and amenities. One zone for every five lakh (or less) population could be
who would chair the meetings of the Area Sabha and would represent considered. Similar zonal offices should also be set up in other big cities
the Area Sabha in the relevant Ward Committee. The State may, by law, within the next three years.
prescribe the procedure and other details for such election;
37. (Para 5.2.4.3) The Office of the Mayor/Chairperson
d. Ward Committees should be set up in every Ward/Corporator’s Division,
The present system of having more than one ward in a Ward Committee a. The functions of chairing the municipal council and exercising executive
needs to be given up; authority in urban local government should be combined in the same
functionary i.e. Chairperson or Mayor.
e. Ward Committees need to be given legitimate functions which can be
handled at that level. These functions could include street lighting, b. The Chairperson/Mayor should be directly elected by popular mandate
sanitation, water supply, drainage, road maintenance, maintenance of through a city-wide election.
school buildings, maintenance of local hospitals/dispensaries, local
markets, parks, playgrounds, etc; c. The Chairperson/Mayor will be the chief executive of the municipal body.
Executive power should vest in that functionary.
f. Funds allocated for the functions entrusted to the Ward Committee should
be transferred en-bloc to the Ward Committee. The budget proposed by d. The elected Council should perform the functions of budget approval,
the Ward Committee in respect to the functions allotted to it should be oversight and framing of regulations and policies.
taken into account in formulating the overall municipal budget;
e. In municipal corporations and metropolitan cities, the Mayor should
g. Meetings of the Ward Committee should be widely publicised to ensure appoint the Mayor’s ‘Cabinet’. The members of the Cabinet should be
maximum citizens’ participation; chosen by the Mayor from the elected corporators. The Mayor’s Cabinet
shall not exceed 10 per cent of the strength of the elected Corporation or
h. Ward Committees should be given a share of the property taxes collected fifteen, whichever is higher. The Cabinet will exercise executive authority
from the ward, depending on the locality; on matters entrusted to them by the Mayor, under his overall control and
direction.
i. The allocation of functional responsibilities between the tiers must be
clearly spelt out. While doing so, the principle of subsidiarity should be

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38. (Para 5.2.5.4) Management Structure of Urban Local Governments f. The law should provide for the levy of service charge on properties belonging
to the Union and State Governments. This service charge should be in lieu
a. The Mayor should be the Chief Executive of the municipal body while the
of various services provided such as solid waste management, sanitation,
Commissioner should perform the functions delegated to him/her.
maintenance of roads, streetlighting and general civic amenities.
b. The responsibility for selection and appointment of the Commissioner
and other staff may be given to the Metropolitan Corporations within a g. A periodic physical verification of the properties and the taxes levied on
period of two years. For other bodies this may be done within three years. them should be carried out in each municipal area by a separate wing
States should, however, by law, lay down the procedure and conditions directly under the control of the Chief Executive.
of such appointment. For the duration that the Commissioner/Chief h. A computerised data base of all properties using GIS mapping should be
Officer continues to be drawn from the State Government, selection should prepared for all municipal areas.
be made by the Mayor from out of a panel of names sent by the State
Government. i. Randomly selected cases of assessment should be audited by the government
auditors as is done by C&AG in case of Union taxes.
c. The Directorates of Municipal Administration, wherever they exist, should
be abolished. In case there are State-wide cadres of municipal employees, 40. (Para 5.3.4.2) Octroi
no fresh appointments to these may be made and the employees should be
absorbed in municipal bodies through a due process. a. Octroi should be abolished, but the States should evolve mechanisms to
compensate the local governments for the loss of revenue caused by such
39. (Para 5.3.3.8) Property Tax Reforms abolition.

a. State Governments should ensure that all local bodies switch over to the 41. (Para 5.3.5.2) Other Taxes
‘unit area method’ or ‘capital value method’ for assessment of property tax
in a time-bound manner. a. The following principles should be followed while administering all
taxes:
b. The categories of exemptions from property tax need to be reviewed and
minimised. i. The manner of determination of tax should be made totally
transparent and objective;
c. In order to ensure that unauthorised constructions do not escape the tax
net, State laws should stipulate that levy of tax on any property would not, ii. As far as possible, all levies may be based on self declaration of the
in itself, confer any right of ownership, in case the property is found to be tax payer but this should be accompanied by stringent penalties in
constructed in violation of any law or regulation. case of fraud or suppression of facts by the tax payer;

d. Tax details for all properties should be placed in the public domain to avoid iii. The cost of tax collection and of compliance should be reduced to a
collusion between the assessing authority and the property owner. minimum;

e. The State law should also provide for tax on properties belonging to iv. There should be an independent unit under the Chief Executive to
the municipal authorities which are given on lease, to be payable by the monitor the collection of all taxes; and
occupants.
v. The appeal against orders of assessing officers should lie with an
independent quasi-judicial authority.

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b. Article 276(2) may be amended to enhance the upper ceiling on Profession c. Until the development authorities are merged with urban local bodies, a
Tax and this ceiling should be reviewed periodically. proportion of the revenue realised by such agencies from the sale of land,
say, 25%, should be made available to the municipalities for meeting their
42. (Para 5.3.6.8) Non Tax Revenues infrastructure financing needs.
a. A significant portion of grants to the municipalities must be linked with d. The respective municipal laws should provide that any built up property
their own efforts at resource raising. of municipal bodies shall not be given on rent/lease without following a
competitive process. Such a lease period shall not exceed five years.
b. An impact study should be carried out for all major developments in the
city. A congestion charge and/or betterment levy in relation to such projects 45. (Para 5.4.2.10) Regulatory Services
may be levied wherever warranted.
a. A time-bound programme for updating and simplification of all regulatory
c. The power to impose fines for violation of civic laws should be given to provisions relating to the ULBs should be made mandatory. Each State
municipal authorities. The relevant laws may be suitably modified. Government should create a task force to examine and suggest simplification
of procedures in local governments. This task force could also suggest steps
d. The fines prescribed for civic offences need to be enhanced. The amount of
to be taken to reduce discretion and bring objectivity in the field offices of
fine should be regulated by Rules under the law so that it could be revised
local governments. The city municipal corporations could undertake such
periodically without the necessity of an amendment to the law.
an exercise on their own.
43. (Para 5.3.7.7) Borrowings
b. All service providers in cities should be brought under one umbrella by
a. The limits of borrowings for various municipal bodies in a State may be establishing ‘one stop service centres. This could be completed within two
fixed on the recommendation of the SFC. years in all cities. Call centres, electronic kiosks, web based services and
other tools of modern technology should be used by all ULBs to bring
b. Municipal bodies should be encouraged to borrow without Government speed, transparency and accountability into delivery of services to the
Guarantees. However, for small municipalities, pooled financing citizens.
mechanisms will have to be put in place by the State Government.
c. Citizens’ charters in all Urban Local Bodies should specify time limits for
c. The capacity of the municipalities to handle legal and financial requirements approvals relating to regulatory services such as licenses and permits and
of responsible borrowing must be enhanced. these should be scrupulously adhered to. The charter should also specify
the relief available to the citizens in case of non adherence.
44. (Para 5.3.8.7) Leveraging Land as a Resource
d. A system of self certification by registered architects for issue of building
a. Municipal bodies should have a periodically updated database of its permits should be introduced in all ULBs with immediate effect, to start
properties. IT tools like GIS should be used for this purpose. This database with, for individual residential units.
should be in the public domain;
46. (Para 5.4.3.1.5) Creating a Responsive Institutional Framework
b. Land banks available with the municipalities as well as with the development
authorities should be leveraged for generating resources for the municipalities. a. The local government should be responsible for providing civic amenities
However, such resources should be used exclusively to finance infrastructure in its jurisdiction.
and capital expenditure and not to meet recurring costs.

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b. In respect of all downstream activities of a particular State utility, as soon as In larger cities, non-potable water (recycled treated water) should be used
it enters the geographical and administrative boundary of an Urban Local for industries.
Body, the Government utility/parastatal should become accountable to the
ULB. 48. (Para 5.4.3.3.9) Sewerage Management

47. (Para 5.4.3.2.8) Water Supply a. Sanitation, as a matter of hygiene and public health, must be given due
priority and emphasis in all urban areas. In all towns, advance action for
a. Urban Local Bodies should be given responsibility for water supply and laying down adequate infrastructure should be taken to avoid insufficiency
distribution in their territorial jurisdictions whether based on their own of services.
source or on collaborative arrangements with parastatals and other service
providers. b. Each municipal body should prepare a time bound programme for
providing sewerage facilities in slum areas. This should be brought into
b. Metropolitan Corporations may be given responsibility for the entire water action through appropriate allocation in the annual budget. Local bodies
supply programme from development to distribution. For other urban may impose a cess on the property tax or development charges in order
local bodies, a phased transfer of responsibilities for management of the to raise resources for expansion and capacity enhancement of the existing
distribution networks within their territorial jurisdiction while leaving sewerage systems. In order to motivate the local governments to generate
source development to the parastatal agency would appear to be the most additional resources for sewerage management, matching grants may be
feasible approach. provided by the Union and State Governments.

c. State Finance Commissions may be entrusted with the task of developing c. Community participation and co-production of services should be
suitable normative parameters for different classes of local governments encouraged by municipal bodies. This should be supplemented by
for arriving at optimum tariff structure. awareness generation.

d. Municipal bodies must focus on increasing operational efficiencies d. A separate user charge should be introduced in all municipalities, even as a
– through reduction in pilferage, improving efficiency of staff and use of minimum levy, for sanitation and sewerage, as distinct from water charges.
technology. State Finance Commissions may be entrusted with the task of developing
suitable normative parameters for different classes of local governments
e. The municipal bodies should meter all water connenction within a time for arriving at optimum user charges.
frame. Installing a hierarchy of metering system could help in identifying
pilferage. Payment of water charges should be made hassle free through 49. (Para 5.4.3.5.3) Solid Waste Management and Scavenging
use of Information Technology. As far as possible all water connections
should be metered, and if necessary targeted subsidy should be provided a. In all towns and cities with a population above one lakh, the possibility of
to the poorest sections. taking up public private partnership projects for collection and disposal of
garbage may be explored. This should, however, be preceded by development
f. Infrastructure development plans for water supply should be integrated of capacity of the municipal bodies to manage such contracts.
with the CDPs.
b. Municipal bye-laws/rules should provide for segregation of waste into
g. Municipal bye-laws should provide incentives for adoption of water definite categories based on its manner of final disposal.
harvesting measures and recycling of waste water for non-potable purposes.
c. Special solid waste management charges should be levied on units
generating high amount of solid waste.
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d. Extensive surveys should be carried out by the State GovernmentsAnnexure-I(1)

to identify health as distinct from clinical services, and on preventive and not only
manual scavengers and estimate the number of dry latrines in existence curative aspects of health care.
within six months.
e. Institution specific standards should be prescribed for schools and hospitals
e. Following the survey, adequate funds should be allocated for the purpose and third party assessments carried out to monitor performance in service
of eradication of manual scavenging within one year. delivery. Performance based incentives should be prescribed at all levels
by breaking salary ceilings to guarantee service outcomes and linking
f. Central Assistance to States Annual Plan should be tied to eradication of permanence in service to performance.
manual scavenging. Funds allocated under the JNNURM should also be
linked to it. f. Recruitment for hospitals and schools should be made to an institution/
Society, moving away from non accountable State level recruitment.
50. (Para 5.4.3.6.4) Power Utilites and Municipal Bodies
g. Local bodies should ensure convergence among health systems,
a. Municipal bodies should be encouraged to take responsibility of power sanitation facilities and drinking water facilities. Primary level public
distribution in their areas. This, however, should be done after adequate health institutions in urban areas should be managed by the urban local
capacity building in these organisations. bodies.
b. Municipal building bye-laws should incorporate power conservation h. For all services provided by local governments there is need to develop a
measures. set of performance indicators. The concerned Ministry should lay down
broad guidelines for this purpose. Thereafter, the State Governments could
c. Municipal bodies should coordinate the layout plans for the distribution
lay down norms for this purpose.
networks of power and other utilities.
i. The concerned Ministry should maintain a State-wise database about the
51. (Para 5.4.4.3) Services for Human Development
performance of various service delivery systems. Similarly, the State should
a. There has to be a shift in emphasis in the crucial service delivery sectors have a database for such services covering all municipal bodies.
of education and health from centralised control to decentralised action,
52. (Para 5.4.5.15) Urban Transport Management
from accountability to the State department to accountability to the local
communities and from employment guarantee to service guarantee. a. Urban Transport Authorities, to be called Unified Metropolitan Transport
Authorities in the Metropolitan Corporations, should be set up in cities
b. It is necessary that all schools are made functionally self-sufficient, in as
with population over one million within one year, for coordinated planning
much as basic facilities and classroom requirements are provided in all
and implementation of urban transport solutions with overriding priority
urban schools within the next two years.
to public transport.
c. The municipalities, especially the larger ones, should seek the help of NGOs,
b. UMTAs/UTAs should be given statutory powers to regulate all modes of
the corporate sector and individual volunteers for assistance in running
public transport, decide on complementary routes for each operator, and
schools. Indeed, it would be useful to initiate a voluntary service element
fix fares as well as service standards, etc. In addition, UMTAs/UTAs should
in our social sector to improve service delivery.
be given financial powers and resources to give or recommend financial
d. The trend in urban areas to shift towards private healthcare needs to be support, where necessary, to operators on unviable routes.
seen as an opportunity by the City authorities to concentrate on public
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 Summary of Recommendations Local Governance

c. Integration of land use with transport planning should be made mandatory d. Capacity building measures should not be confined to only the selected
for all ULBs as well as planning bodies such as the DPCs and MPCs. towns and should be available for all cities/towns.

d. Demand for transportation in cities should be managed by adopting 54. (Para 5.4.7.2) A Critical and Urgent Area of Reform - Real Estate
demand control measures like:
a. There is urgent need to bring in legislation to regulate the Real Estate sector
i. Imposition of congestion levies; on the lines mentioned in paragraph 5.4.7.1.
ii. Pedestrianisation of certain zones; and
iii. Reserving access to certain areas only through public transport. 55. (Para 5.5.2.9) Re-Forming Mega Cities

e. Revitalisation of public transport services in cities should be taken up as a. Public-Private Partnership projects for redevelopment of inner city areas
priority projects under JNNURM and by tapping other sources of revenue need to be encouraged through a transparent and well structured regulatory
as has been done in Indore and other cities. The aim should be to promote regime of incentives and penalties.
well structured public-private initiatives for modernising and redefining
56. (Para 5.5.3.4) Developing 25-30 World Class Mega Cities in India
public transport. At the same time the efficiency of the existing State owned
transport systems needs to be improved. a. Government should prepare an action plan to redevelop about 25-30 cities
(having a population of more than a million) to achieve international level
f. Public transport systems should generally be multi-modal. The modes
amenities and services as modern megacities of the future.
should be based on economic viability. High capacity public transport
systems like metro rail or high capacity bus systems should form the b. Reform linked initiatives like JNNURM are an opportunity to complement
backbone in mega cities spplemented by other modes like a bus system. physical development with enforcement of civic laws and general law
enforcement in order to usher in genuine civic regeneration in our cities.
g. While building transport infrastructure in cities, it must be ensured that
In addition to infrastructure development in our cities, such large capital
the needs of the pedestrians, the elderly, the physically challenged and
investment programs for city development should be invariably linked
other users of non motorised means of transport are adequately met.
with a zero tolerance strategy towards civic violations.
53. (Para 5.4.6.14) JNNURM - A Reform Process
c. As mentioned in the Commission’s report on ‘Public Order’, a “zero
a. On the basis of projections, the total investment needed for urban renewal tolerance strategy” can be institutionalised in the enforcement departments
appears to be far in excess of the funds available. Government must find ways of local bodies by using modern technology to monitor the levels and trends
and means to fund this flagship programme – JNNURM – adequately. in various types of civic offences. These can then be linked to a system of
incentives and penalties to hold accountable the officials working in these
b. The conditionalities linking reforms with fund flows should be enforced as departments. On the spot fines and other summary penalties should be used
per the schedules agreed between the ULBs and the Government of India to inculcate civic discipline and deter and prevent minor civic violations
without exceptions or relaxations. that are at present largely ignored.

c. There should be sectoral allocations for sanitation and solid waste 57. (Para 5.5.4.7) Authorities for Metropolitan Corporations
management.
a. As recommended in the Commission’s report on ‘Public Order’, a
Metropolitan Police Authority should be set up in all cities with a

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 Summary of Recommendations Local Governance

population above one million to oversee community policing, improve b. The thrust of the urban poverty alleviation schemes should be on
police-citizen interface, suggect ways to improve quality of policing, upgradation of skills and training. Training institutes may be set up
approve annual police plans and review the working of such plans. on the lines of RUDSETIs for imparting training to the urban poor for
self employment. These institutes could also help in developing wage
b. As recommended in para 5.4.5.15 of this Report, a Unified Metropolitan employment related skills.
Transport Authority should be set up in an all mega cities for coordinated
planning and implementation of urban transport solutions with overriding c. In case of setting up of micro-enterprises, the urban poverty alleviation
priority to public transport. schemes should be flexible in selecting projects and providing financial
assistance.
c. For all Metropolitan Corporations, which may be defined as cities with a
population exceeding 5 million, MPCs may be constituted with the Chief d. To maximise the benefits of micro-finance, formation of Self-Help Groups
Minister as the Chairperson in order to give the required impetus to the (SHGs) needs to be encouraged. Institutions and NGOs with good
process of planning for such urban agglomerations. track record should be encouraged to promote SHGs for availing micro-
finance.
d. In all cities with a population exceeding five million, a Metropolitan
Environment Authority needs to be set up with powers delegated by 60. (Para 5.6.3.3.4) Measures for Poverty Alleviation - Literacy
the State Government from the State Pollution Control Board and
related authorities. It should be vested with adequate powers for urban a. The education plan should form an integral part of the development plan
environmental management within the city limits. for the city.

58. (Para 5.6.2.3) Beneficiary Identification 61. (Para 5.6.3.4.2) Measures for Poverty Alleviation - Health and Nutrition

a. An exhaustive survey to identify the urban poor should be carried out within a. Urban Local Bodies should adopt the concept of ‘Primary Health Care, for
one year. The parameters to be used for such identification should be simple providing health and medical facilities to the urban poor, particularly to
and easily comprehensible, allowing objective measurement without the women and children with the help of auxiliary health staff. These should
use of discretion. The basic parameters should be spelt out at the national specifically cater to the population living in slum areas.
level. The identification should be based on a door-to-door survey with the
62. (Para 5.6.3.6.3) Slums in Urban Areas and Land Use Reservation for the Poor
survey teams including at least one person from the Area Sabha concerned.
The urban poor so identified may be issued multi-utility identity cards for a. There has to be total redevelopment of slum areas. While redeveloping,
availing benefits under all poverty alleviation programmes. it should be ensured that adequate provision has been made for schools,
health centres, sanitation etc.
59. (Para 5.6.3.2.5) Measures for Poverty Alleviation - Employment
b. For slum redevelopment the approach suggested in para 5.6.3.5.11 may
a. After identifying the urban poor through surveys, a mission mode approach
be considered while formulating policy or specific schemes.
would need to be adopted for alleviating urban poverty in a time-bound
and systematic manner. The urban local bodies may also have their own c. It is necessary to earmark and reserve a certain percentage of land projects
poverty alleviation schemes with adequate backward and forward linkages in each town and city for the urban poor. If a construction cannot allocate
converging with the other poverty alleviation schemes. housing for the poor, the developer must, at his own cost, provide suitable
housing in any other appropriate place acceptable to the authorities.

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 Summary of Recommendations Local Governance

d. A detailed programme for the provision of night shelters needs to be bye-laws. However, they can have autonomy for provision of infrastructure
drawn up in all cities, beginning with large cities having Metropolitan and and services within their precincts and /or for collection of taxes and charges
Municipal Corporations, for implementation. (para 5.7.7.2 )

63. (Para 5.7.2.12) The Town and Country Planning Act(s) b. The establishment of private, gated colonies must be allowed only within
the broad parameters of the larger regional urban planning process where
a. The City Development Plan (CDP) and zoning regulations once approved the development plans must clearly indicate spaces for private expansion
should remain in force for ten years. No authority should normally have make mandatory provision for low cost housing and should be integrated
any power to change the CDP. with the availability of infrastructure services.

b. Infrastructure plans should be made an integral part of the City Development 66. (Para 5.7.7.4) Special Economic Zones (SEZs)
Plan (CDP) in order to ensure that urban planning in cities become a truly
holistic exercise. a. As in the case of private townships, concerned local bodies should have full
jurisdiction with regard to enforcement of local civic laws in the SEZs.
c. The existing system of enforcement of building regulations needs to be
revised. It should be professionalised by licensing architects and structural b. SEZs may be given autonomy for provision of infrastructure and amenities
engineers for assessment of structures and for certification of safe buildings. in the SEZ area. A formula for sharing the resources raised in the SEZ area
The units of local bodies dealing with enforcement of building bye-laws needs to be developed.
and zoning regulations also need to be strengthened. 67. (Para 5.8.4) Urban Local Bodies and the State Government
d. Prevention of Disaster Management must find a prominent place in spatial a. Municipal governments should have full autonomy over the functions/
planning. Specific guidelines need to be framed by the Ministry of Urban activities devolved to them.
Development. These should be addressed by including them in the zoning
regulations and building bye-laws. b. If the State Government feels that there are circumstances that make it
necessary to suspend or rescind any resolution passed by the Urban Local
e. The standards prescribed by BIS for disaster resistant buildings should Bodies or to dissolve or supersede them, it should not do so unless the
be available in the public domain, free of cost. They should also be matter has been referred to the concerned local body Ombudsman and the
posted on websites of the concerned government agencies to promote Ombudsman recommends such action.
compliance.
c. If, on any occasion, the State Government is in possession of records or
64. (Para 5.7.5.3) Development Areas has adequate reasons to initiate action against the Urban Local Bodies or
a. In respect of all townships and satellite towns developed under the its elected representatives, it should place the records before the local body
development authorities, it should be ensured that as soon as the Ombudsman concerned for investigation.
development process is completed, jurisdiction over the township should
be transferred to the local bodies.

65. (Para 5.7.6.5) Private Townships

a. Private townships and gated communities must be placed under the

jurisdiction of the concerned local body and subject to its laws, rules and
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 NINTH REPORT

SECOND ADMINISTRATIVE REFORMS COMMISSION CONCLUSION

People’s participation in governance is recognized the world over as a prerequisite of good

governance. The growth and development of society is critically dependent on its internal
institutions, particularly those created by people’s initiative and vigour. Some of these
institutions are for non-profit, some for mutual benefit of a group and some for raising
income levels of their members. Collectively they play a major role in contributing to good
governance and to economic and social development.

In the sociological context, these institutions produce cohesiveness and mutual trust.
In the economic sphere, these qualities together constitute the fourth essential factor of
production; land, finance and entrepreneurship being the other three. And, in the field of
public governance, such institutions represent people’s participation and initiative which
add strength to instruments of State. Realizing their growing importance in economic and
social management and public administration, sociologists and development theorists now
define them as ‘Social Capital Institutions’.
SOCIAL CAPITAL
- A Shared Destiny A State with strong democratic norms and traditions allows greater opportunity to social
capital institutions to organise and activate people around many key areas of public activity
such as welfare and delivery of services. It leads to formation of a polyarchic society.

The Report has tried to comprehensively cover all categories of such institutions which are
currently in existence in various parts of the country (Societies, Public Trusts, Cooperatives,
Self-Help Groups, Producer Companies and Professional Self-Regulatory Bodies). The
composition, functions and legislative environment of each of these have been analysed
in detail and specific suggestions have been made to enhance their efficacy so that they
play a greater role in development of India’s polity and economy. The Report emphasizes
the need to bring about ‘attitudinal changes’. The Report also suggests direct involvement
of people to increase openness and public sensitivity in functioning of these institutions.
The Commission firmly believes that if the recommendations put forth in this Report are
implemented, it will bring about far reaching changes in the working of the entire third
AUGUST 2008
sector. It will (a) bring charity organisations closer to public good, (b) improve conduct of
professional practitioners, (c) lead to better governance of technical, management and other

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professional education institutions, (d) rejuvenate cooperatives, (e) strengthen rural credit
structure, and (f ) provide opportunities of skill enhancement to the poor and enable them
to earn more. The overall impact will be the emergence of a healthy, vibrant and responsive
civil society. This would help in creating a caring society which would follow Mahatma SUMMARY OF RECOMMENDATIONS
Gandhi’s vision as embodied in the following lines:

“I venture to suggest that it is the fundamental law of Nature, without exception, that
Nature produces enough for our wants from day to day, and if only everybody took 1. (Para 3.1.2.6) New Legal Framework for Charities in India
enough for himself and nothing more, there would be no pauperism in this world,
there would be no man dying of starvation in this world. But so long as we have got a) The Union Government should draft a comprehensive model legislation
this inequality, so long we are thieving.” covering both Trusts and Societies in lieu of the existing laws on Societies,
Trusts, Endowments and Charitable Institutions etc.
For many decades, these institutions have operated with considerable functional freedom.
b) In place of the present charity administration consisting of a Charity
Many of the Professional Bodies have become politicized and have deviated from their original
Commissioner / Inspector General of Registrations as existing in the States,
intent. A number of Societies and Trusts are perceived to have become pocketburroughs of
the proposed law should provide for a new governance structure in the
a few who use them for their own benefits. The Cooperative sector across the country too
form of a three member Charities Commission in each State with necessary
stands in complete disarray. The Commission recognizes that people who are well entrenched
support staff for incorporation, regulation and development of Charitable
in the current system will not readily agree to shedding their powers and privileges. What we
Organisations. The Chairman of the Commission should be a law officer
need is an unwavering commitment to reform on the part of governments and an equally
drawn from the cadre of District Judges. Out of the other two members,
strong willingness on the part of civil society to work for these changes.
one should be drawn from the voluntary sector and the other would be an
officer of the State Government. In addition, the State should also have a
Charities Tribunal which would exercise appellate powers over the orders
of the Charities Commission.

c) The proposed model legislation should indicate a cut off limit with regard
to the annual revenue of a Charity. Organisations having an annual income
below this threshold will have lighter compliance requirements with respect
to submission of returns / reports / permission etc. However, if irregularities
are detected in their functioning, the organisations will be liable for legal
and penal action. To start with, the cut off limit could be set at Rs.10 lakhs
which could be reviewed for upward revision once in five years.

d) The government should set up an Inclusive Committee which will

comprehensively examine the issue of defining ‘Charity’ and ‘Charitable
Purpose’ and suggest measures to “soften” charities-government
relationship, particularly in tax matters.

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Summary of Recommendations

4. (Para 3.3.7) Charitable Organisations and Tax Laws

e) The model legislation should take into consideration the views and
suggestions made above with regard to the following issues of charity a) Under Section 12AA and Section 80G, the registration or approval should
administration: be granted or an order rejecting the application should be passed within
a period of ninety days from the date of filing of the application instead
i. Interface with the State Government
of the present one hundred and eighty days.
ii. Alteration in the memorandum
b) In view of the fact that infrastructure projects are a critical component of
iii. Approval on change report charitable institutions, the period for accumulation of surplus which is
currently five years needs to be further enhanced.
iv. Alienation of immovable property
c) The present National Committee may be replaced by four Regional
v. Contribution by Public Trusts to the State Government Committees to recommend “deduction on expenditure” to the Union
Government under Section 35AC of the Income Tax Act.
2. (Para 3.2.6.2.5) Corporate Social Responsibility
5. (Para 3.4.4) Regulation of Foreign Contribution
a) When a community benefit project is taken up by a corporate entity, there
a) The Foreign Contribution (Regulation) Bill, 2006 needs to be amended
should be some mutual consultation between the company and the local
to include inter-alia the following suggestions:
government so that there is no unnecessary overlap with other similar
development programmes in the area. i. There should be a fine balance between the purpose of the legislation
on one side and smooth functioning of the voluntary sector on
b) Government should act as a facilitator and create an environment which the other. The objectives of such a regulatory legislation should
encourages business and industry to take up projects and activities which be properly enunciated to avoid subjective interpretation
are likely to have an impact on the quality of life of the local community. of law and its possible misuse.

3. (Para 3.2.7.2.8) Accreditation of Voluntary Organisations ii. There should be a time limit for procedures falling under Section
11 (seeking registration or prior permission for receiving foreign
a) There should be a system of accreditation / certification of voluntary contribution).
organisations which seek funding from government agencies.
iii. Transparent rules/guideliens should be prescribed for inter-agency
b) Government should take initiative to enact a law to set up an independent consultation particularly in respect of (a) the minimum amount of
Body – National Accreditation Council – to take up this work. In the donation which would require inter-agency consultation, (b) the
beginning, Government may need to provide a one time corpus of funds level of the Authority which would authorise it, and (c) setting up
to this organisation. time limits for such procedures.

c) The above law should provide details with regard to the constitution of iv. To facilitate (a) speedy disposal of registration / prior permission
the Council, its functions, its powers to levy appropriate fees from the petitions received from organisations, (b) effective monitoring of
applicants, and other related matters. their activities, and (c) proper scrutiny of returns filed by them,
some of the functions under the Foreign Contribution Regulation
Act should be decentralised and delegated to State Governments/
District Administration.
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Summary of Recommendations

f) Commercial Banks and NABARD in collaboration with the State

v. Other concerns as stated in paragraph 3.4.1.5.3 also need to be
Government need to continuously innovate and design new financial
considered.
products for these groups.
b) Organisations receiving an annual foreign contribution equivalent to less
than Rs.10.00 lakh in a year (the figure to be reviewed from time to time) g) There should be a planned effort to establish RRB networks in the
should be exempted from registration and other reporting requirements of 87 districts of the country which currently do not have RRB presence.
the law. They should be asked, instead, to file an annual return of the foreign
contribution received by them and its utilisation at the end of the year. The law h) Special steps should be taken for training / capacity building of government
may provide that they may be liable to be investigated, if there is a reasonable functionaries so that they develop a positive attitude and treat the poor
suspicion of suppression / misrepresentation of facts, and penal provisions and marginalized as viable and responsible customers and as possible
of the law will be used against them in case violation is established. entrepreneurs.
6. (Para 4.6.10) Issues of Self-Help Group Movement
i) Rural credit is often viewed as a potential Non Performing Asset. There is
a) The role of the Government in the growth and development of the SHG need to educate government employees and Bank personnel in this regard.
movement should be that of a facilitator and promoter. The objective should Technology may be leveraged to reduce the cost of reaching out to the
be to create a supportive environment for this movement. poorest of the poor.

b) Since a large number of rural households in the North-Eastern States and j) There is need to review the scale of the promotional grant given to SHPIs
Central-Eastern parts of the country (Bihar, Jharkhand, Uttar Pradesh, by NABARD (currently Rs.1500/- per SHG formed and activated).
Uttarakhand, Orissa, Madhya Pradesh, Chhattisgarh and Rajasthan) do
not have adequate access to formal sources of credit, a major thrust on the k) In order to scale up the operations of the Rashtriya Mahila Kosh, its
expansion of the SHG movement in these areas should be facilitated. The corpus should be enhanced substantially. RMK’s geographical reach should
presence of NABARD should be much more pronounced in these places. be expanded to help quick processing of loan applications and effective
monitoring of the sanctioned projects in far off areas. The Kosh may open
c) The SHG movement needs to be extended to urban and peri-urban areas. adequately staffed regional offices at selected places in the country and give
State Governments, NABARD and commercial Banks should join together greater attention to the credit deficient States.
to prepare a directory of activities and financial products relevant to
such areas. l) The Micro Financial Sector (Development and Regulation) Bill, 2007 needs
to be amended to include the following suggestions:-
d) Currently, the commercial Banks, on the basis of a project’s financial
viability can disburse microcredit in urban and semi-urban areas on their i. The scope of Micro-finance Services should be substantially widened
own but such micro-credit disbursements are not entitled to refinance from to cover credit / savings, insurance, pension services, money transfer,
NABARD. If necessary, the NABARD Act, 1981 may be amended suitably issue / discount of warehouse receipts and future / option contracts
to bring urban / semi-urban areas under its refinance mandate. for agricultural commodities and forest produce.

e) The SHG – Bank Linkage model with a mentor SHPI in tow deserves to be ii. ‘Nidhis’ registered under Section 620A of the Companies Act, and
encouraged as the preferred mode for financial intermediation throughout Producer Companies should be brought under the new legislation.
the country. 170
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 Social Capital – A Shared Destiny
Summary of Recommendations

c) The proposed law should take into consideration the following guiding
iii. The activities of Section 25 Companies to the extent they concern
principles while constituting these Councils:
micro-financial services as described under the proposed Bill should
also be brought under the purview of this legislation. However, for i. Such Councils should have full autonomy.
their management and other functions, they will continue to be
governed by the provisions of the Companies Act. ii. The highest policy and decision making Body of these Councils
should have a majority of independent members, and preferably no
iv. The issue of interest rate charged by the MFIs should be left to the more than 2 or 3 drawn from government, who could be there in an
ex-officio capacity.
Regulatory Authority which is being created under the proposed
Bill. iii. These Councils should have a strong and effective grievance redressal
mechanism.
v. It should be ensured that if MFIs are allowed to handle thrift / savings
and money transfer services, they would do so only as business iv. The Councils should be accountable to Parliament and their
correspondents of commercial Banks. Other concerns as stated in Report should be placed before the House annually. In addition,
Para 4.6.9.9.2 also need to be considered. there should be strong norms for suo-motu disclosures under
the RTI Act.
m) Micro-finance institutions covered under the proposed law should be kept
v. Each of these Councils should have a body of experts to advise it
out of the purview of the State laws on money-lending. on accreditation / certification of institutions falling under their
jurisdiction.
7. (Para 5.2.13) Separating Professional Education from Self-Regulatory
Authorities vi. Some of the members of such Councils can be elected from office
bearers of specialty Associations (e.g. Indian Medical Association),
a) Professional education should be taken away from the domain of the existing as these members are elected by the practicing professionals in their
Regulatory Bodies and handed over to specially created agencies – one for individual speciality.
each of the streams of higher/professional education. These Bodies may
be called National Standards and Quality Council for Medicine, National d) Within such norms, standards and parameters, the Universities/
Standards and Quality Council for Management etc. After this bifurcation, Autonomous Institutions should be given full autonomy for setting up
the work of the existing Regulatory Bodies’ would remain confined to issues and running institutions under their jurisdiction.
concerning registration, skill upgradation and management of professional
standards and ethics. On creation of these separate Councils, the AICTE e) The recommendations of the National Knowledge Commission regarding
will stand abolished. reforms in the structure, governance and functioning of Universities should
be examined and implemented on priority. The process of appointment
b) Such Councils should be created by law and their role should be to lay of Vice Chancellors should be free from direct or indirect interference of
down norms, standards and parameters on issues concerning growth the government. Vice Chancellors should be given a fixed tenure and they
and development of their stream viz. (a) setting up new institutions, (b) should have adequate authority and flexibility to govern the Universities
designing/ updating curriculum, (c) faculty improvement, (d) carrying out with the advice and consent of the Executive Council.
research / innovation, and (e) other key issues concerning the stream.
f) There should be stronger ties between educational institutions in the public
and private sectors through mechanisms such as exchange of faculty.
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Summary of Recommendations

c) The law should also have a provision that anybody aggrieved with the
8. (Para 5.3.5) Continuing Professional Education
findings of the State Panel could go in appeal to the National (Apex) Body
a) Every Professional Regulatory Body in coordination with the respective which too will have to dispose of the matter within the prescribed time
National Quality and Standards Council and Academic Institutions should limit (say 90 days).
conduct Continuing Professional Education programmes periodically for
13. (Para 5.8.10) Constitution and Composition of the Self-Regulatory Authorities
updation and skill enhancement of its members.
a) The structure and composition of the General Council and the Executive
9. (Para 5.4.3) Ethical Education and Training
Committee of Professional Regulatory Authorities should be rationalised.
a) After separation of professional education, the agenda of the Professional As far as practicable, it should be uniform for all of them.
Regulatory Authorities should be to focus on (i) procedure for registration b) Every Authority should have a fairly large and representative General
of new members / renewal of registration; and (ii) matters concerning Council (the ideal number could be around 50; such a Body encourages
professional ethics, standards and behavior. The Regulatory Authorities a wider perspective and diversity of opinions).
should also pay greater attention to conducting workshops, seminars and
training programmes on such issues. c) The Executive Committee should be a small Body consisting of 10 to
15 members (a compact forum supports administrative efficiency and
10. (Para 5.5.4) Enrolment in the Profession accountability).
a) Within the parameters of the Act, the respective Regulatory Authority d) There should be an explicit provision that a person cannot be elected to
should be empowered to prescribe guidelines for enrolment of new the post of President / Vice-President or General Secretary for more than
members. one term. However, a person could be elected as a member of a Body for
a maximum of two terms.
11. (Para 5.6.3) Renewal / Revalidation of Registration

a) There should be a provision in the relevant laws that a professional 14. (Para 5.8.12.4) Clients / Users – as Lay Members in Regulatory Authorities
registration/license will need revalidation after a prescribed number of
a) The composition of the General Council as well as the Executive Committee
years. It could be done after successful completion of a course prescribed
should be such that 40% of the strength consists of lay members.
by the respective Professional Regulatory Authority.
b) The nomination of lay members should be done by the Ministry /
12. (Para 5.7.6) Disciplinary Mechanism
Department concerned in consultation with the appropriate Regulatory
a) There should be provision in the relevant laws that in order to bring Authority.
objectivity in their working, the Disciplinary Committees of the Regulatory
15. (Para 5.9.4) Accountability and Parliamentary Oversight
Authorities at both the State as well as the national level should consist of
professional and non-professional members. They could be inducted in a) The laws governing the Self-Regulatory Authories should have a provision
the Committee in the ratio of 60:40 respectively. under which the Regulatory Authority should be required to present an
Annual Report to the Parliament for scrutiny.
b) The law should provide that such Bodies should be required to complete
the entire disciplinary proceeding within a prescribed time span
(say 90 days).
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Summary of Recommendations

17. (Para 6.5.6) Legislative Framework

16. (Para 6.4.10) Cooperatives; Constitutional Context
a) All States (other than Andhra Pradesh, Bihar, Jharkhand, Madhya Pradesh,
a) An Article should be added to Part-IV of the Constitution in the form of
Chhatisgarh, Orissa, Uttarakhand, Karnataka and Jammu and Kashmir)
43B where the State should be made responsible for making such laws
should immediately take steps to enact their own Mutually Aided /
that will ensure autonomous, democratic, member driven and professional
Self-Reliant Cooperative Societies Act on the pattern of the Model Law
cooperative institutions. In that case, a large scale Constitutional
suggested by the Task Force on Revival of Cooperative Credit Institutions.
amendment on the pattern of Parts-IX and IX-A which was introduced
The States where such Acts are already in existence should also examine the
by the 73rd and 74th Amendments, will not be necessary. The proposed
Model Law suggested by the Task Force and amendments in the existing
Article 43B may read as follows: legislations may be made, if so required.
Article 43B: Empowerment of Co-operatives: “The State shall endeavour b) For the next few years, there is need to have parallel laws to deal separately
to secure by suitable legislation or economic organisation or any other way with (i) the Mutually Aided / Self-Reliant cooperative societies formed
autonomous, democratic, member driven and professional cooperative under the recent enactments (post 1995), and (ii) societies formed under
institutions in different areas of economic activity particularly those relating the old laws in which the government still has financial stakes. The societies
to agriculture.” referred at (ii) above should gradually be encouraged to clear off their
liabilities and convert into Mutually Aided Societies.
b) The Commission endorses the amendments suggested by the National
Advisory Council and feels that this coupled with the amendment 18. (Para 6.6.8) Producer Companies
suggested in the Directive Principles would be a step in the right direction
to make the cooperative institutions voluntary, democratic, professional, a) A new law regarding Producer Companies should be enacted on the basis
member-driven and member-centric enterprises. Accordingly, the following of the following broad principles:
amendments may be made in the Constitution:
i. Producer Companies should be given a liberal charter of functions
i. Under Article 19, 19(1)(h) may be added as follows: to take up any primary activity as per their technical and financial
capability;
“(h) to form and run cooperatives based on principles of voluntary
and open membership, democratic member control, member ii. The law should provide for flexibility in investment of funds,
economic participation, and autonomous functioning free from State surpluses / reserves;
control.”
iii. Depending on their functional requirement and financial strength,
ii. Correspondingly, Article 19(4) should be amended as follows: a Producer Company should have full flexibility in creating /
abolishing executive and managerial posts;
“(4) Nothing in sub-clauses (c) and (h) of the said clause shall affect
the operation of any existing law in so far as it imposes, or prevents iv. The compliance requirements with regard to the Company’s audit
the State from making any law imposing, in the interests of [the and accounts should be in tune with the size of its operations; and
sovereignty and integrity of India or] public order or morality, v. The law should have provision for proxy voting in order to facilitate
reasonable restrictions on the exercise of the right conferred by the smooth conduct of elections and general meetings.
said sub-clause”.
b) Co-operatives should be encouraged to incorporate themselves as Producer
Companies under the existing provisions of Part IXA of the Companies

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 Summary of Recommendations

Act, 1956 and subsequently under the new law, as and when enacted, as GOVERNMENT OF INDIA
this would be a more viable option in the present environment. The existing
inter-State cooperative societies may also explore the possibility of getting
themselves converted into Producer Companies.

19. (Para 6.7.15) Cooperative Credit and Banking Institutions

a) The process of implementation of the revival package for Short-Term

Rural Cooperative Credit Structure (STCCS) formulated on the basis of
the Vaidyanathan Committee Report should be completed immediately.
SECOND ADMINISTRATIVE REFORMS COMMISSION
It consists of the following major steps :

i. States which have so far not signed the MOU for this purpose should
be asked to do so without further loss of time.

ii. The Banking Regulation Act, NABARD Act and the State Cooperative
Societies Acts need to be suitably amended in order to improve the
management/governance of cooperative credit institutions.

iii. A model Cooperative Law needs to be enacted by the States. States TENTH REPORT
which do not wish to pass the Model Act, should introduce a separate
chapter on Agricultural and Rural Credit Societies containing the
salient provisions of the Model Law in their existing Cooperative
legislation.

b) Similar steps should be taken in a time-bound manner in respect of the

recommendations of the same Committee on Long-Term Cooperative
Credit Structure (LTCCS).

20. (Para 7.7) Integrated Social Policy REFURBISHING OF PERSONNEL ADMINISTATION

Scaling New Heights
a) Government should craft an integrated social policy which will ensure
priority State action on the key issues relating to social justice and
empowerment.

b) Government should provide a significant portion of its plan allocation for

implementation of this integrated social policy.

NOVEMBER 2008

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 CONCLUSION SUMMARY OF RECOMMENDATIONS

The challenges of refurbishing personnel administration are substantial and urgent. 1. (Para 5.3.6) Stage of Entry into the Civil Services
Increasing productivity and high economic growth will allow Indians to enjoy improved
standards of living, higher employment and better access to public services. A key to this a. Government of India should establish National Institutes of Public
transformation is to build a modern world class civil services to improve India’s governance Administration to run Bachelor’s Degree courses in public administration/
and as we have highlighted in our Approach Paper “good governance is perhaps the single governance/management. In the long run it is expected that these specialized
most important factor in eradicating poverty and promoting development”. centres of excellence (National Institutes of Public Administration) would
evolve as major sources of civil services aspirants.
The Commission recognizes that the civil services in India have made vital contributions
to national development through the advice and services it has rendered. The high ethical b. Selected Central and other Universities should also be assisted to offer such
standards, professionalism, independence and the quality of policy advice it provides are graduate level programmes in public administration/governance/public
both acknowledged and valued but the fact remains that the civil services are still not management which will produce graduates to further expand the pool of
adequately equipped to function efficiently and competitively in a dynamic economy. eligible applicants to the civil services.
These shortcomings are apparent in the complex array of outdated, rigid and cumbersome
c. The courses offered in these universities should include core subjects such
regulations, systemic inflexibilities and a culture which does not adequately promote or
as the Constitution of India, Indian legal system, administrative law, Indian
recognize performance. Improved performance of our civil services is an imperative if India
economy, Indian polity, Indian history and culture apart from optional
is to take its rightful place as a global power. The Commission is of the view that wide
subjects.
ranging reforms are necessary to transform our civil service into one which epitomizes
best practices, is committed to continuous improvements and exemplifies contemporary d. Graduates of the above mentioned special courses from the National
management techniques. In its Report, the Commission has, therefore, recommended a Institutes of Public Administration and selected universities would be
wide array of reforms that aim at building a civil service that is relevant for the 21st century. eligible for appearing in the Civil Services Examinations. Further, graduates
These include reforms in the system of recruitment focusing on substantially lowering the in other disciplines would also be eligible to appear in the Civil Services
age of candidates for civil services so that candidates can be groomed at an early age to take Examination provided they complete a ‘Bridge Course’ in the core subjects
up the responsibility of an administrator. In training, the Commission has emphasized mentioned above. The Bridge course should be run by the same selected
mandatory induction training at all levels. For senior positions, the Commission has national institutes/universities, which conduct the graduate level courses
stressed the principle of competition and transparency in placements and postings. To stated in (c) above.
enhance accountability, the Commission has recommended rationalization of disciplinary
procedures and a fitness bar on completion of 20 years of service. All these reforms are e. Liberal need-based scholarships should be provided to students admitted
proposed to be given a statutory basis through the new Civil Services Law. These reforms to the Institutes/Universities.
when implemented, will help build a forward looking but cohesive civil service welded
together by shared values and public service rather than bound by conformity to regulation f. An ‘Expert Committee’ should be appointed immediately by the
and systemic rigidities. Government in consultation with UPSC to develop the curricula and

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 Refurbishing of Personnel Administation – Scaling New Heights Summary of Recommendations

determine the admission policy to these selected institutes/universities. 2. (Para 5.4.17) Age of Entry and Number of Attempts
This Committee should inter alia have the following terms of reference:
a. The permissible age for appearing in the Civil Services Examination should
i. Lay down norms for identification universities and institutes where be 21 to 25 years for general candidates, 21 to 28 years for candidates from
the said courses would be conducted. OBC and 21 to 29 years for candidates from SC/ST as also for those who
are physically challenged.
ii. Design the content of the curricula for the said courses in public
administration. b. The number of permissible attempts in the Civil Services Examination
should be 3, 5, 6 and 6 respectively for general candidates, candidates
iii. Prescribe the modalities for admission to these courses. from OBC, candidates from SC/ST and physically challenged candidates
respectively.
iv. Prescribe the modalities and design of the bridge courses.
c. The present cut-off date for determining the eligibility in terms of age
The Commission strongly recommends that the Expert Committee be
(i.e. 1st of August in the year of the examination) may continue.
appointed straightway so that the new courses could be started in some
of these institutions/universities from the coming academic year. The 3. (Para 5.5.5.3) Structure of the Civil Services Examination
Commission also feels that the bridge courses and their effectiveness should
be reviewed based on the experience of five years. a. Structure of Examination: Either of the following two models may be
adopted for compressing the examination cycle.
g. Since this is a major reform relating to an important area of governance and
will need coordinated guidance, especially in the initial years, a high-level i. The Preliminary and Main Examinations for the Civil Services
oversight/coordination committee with the Prime Minister as Chairman Examination would be conducted together on two to three consecutive
may be constituted to meet once in three months and give guidance to the days. Evaluation of papers for the Main Examination should be done
implementing agencies and concerned institutions. in case of only those candidates who have secured a threshold level of
marks in the Preliminary Examination. The personality test would
h. The reforms to the scheme of the examination system as recommended in follow thereafter.
paragraph 5.5 may be taken up immediately. Examination and Recruitment
reforms following the introduction of public administration/governance OR
management as a full-fledged degree course in National Institutes of
Public Administration and selected universities would take some time to ii. Based on the results of the Preliminary Examination, candidates
be operationalised. Till then, the existing system, where students from all eligible for taking the main examination and the personality test
disciplines can appear for the competitive examinations, may continue. would be short listed in accordance with their rankings. Only these
short-listed candidates would be eligible for appearing in the Main
i. Students who have acquired a graduation degree in the above-mentioned Examination, which would be conducted within two months of the
course would have option to join any other career of their choice either in Preliminary Examination. The short list would be limited to about
the public or private sector. two to three times of the number of vacancies available. Thus it would
be possible to start the Personality Test and the Main Examination
almost simultaneously.

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b. Content: c. The mechanism mentioned above should also be applied in case of induction
into other All India Services at the State level.
i. The Preliminary Examination should consist of an objective type
test having one or two papers on general studies including the d. Induction by way of promotion into Group ‘A’ Central Services should,
Constitution of India, the Indian legal system, Indian economy, in addition to consideration of ACRs, also be done through conduct of
polity, history and culture. There should be no optional subjects. examination on the basis of the criteria as mentioned above. The nature
of the examination, ratio of posts to be filled by promotion etc. should be
ii. The Main Examination should consist of two papers only in the decided by the concerned departments in consultation with the UPSC.
compulsory subjects. These compulsory subjects may include
Constitution of India, Indian legal system, Indian economy, polity, 5. (Para 5.8.6) Allotment of Cadres to the All India Services
history and culture etc. The question papers should be of the
conventional descriptive type. Besides, there should be a separate a. The following amendments should be made in the new Cadre Allocation
essay paper as a part of the Main Examination. Policy (2008) for allocation of Cadre to candidates selected for the IAS:

c. Steps may be taken by DOPT in consultation with the UPSC to finalise i. At least one vacancy each year in each of the cadres of AGMUT (only
the syllabi of compulsory subjects for the both the preliminary and main for the State of Arunachal Pradesh) Manipur, Meghalaya, Mizoram,
examination, for the recruitment cycle 2010. This could later on be Nagaland, Sikkim and Tripura may be allotted to a successful
dovetailed with the recommendation of the “Expert Committee” suggested candidate domiciled therein provided he/she has opted for his/her
in Paragraph 5.3.6. home State. This may be done even if there is no ‘insider’ vacancy in
these cadres.
4. (Para 5.7.5) Other Modes of Induction into the Civil Services
ii. In case there is more than one eligible candidate, then the allotment
a. The induction of officers of the State Civil Services into the IAS should be may be done in the order – ST, SC, OBC and General candidates, as
done by the UPSC on the basis of a common examination. applicable to each state.

b. UPSC should conduct such an examination annually for officers from iii. Once the home State quota of the above-mentioned North Eastern
the State Civil Services who have completed 8 to 10 years of service in States is filled up, further allocation may be done as per the Cadre
Grade ‘A’ posts. The eligibility criteria should also include norms such as Allocation Policy (2008), after making adjustments necessitated by
an upper age limit of 40 years etc. On the basis of this examination, the the changes recommended above.
UPSC should provide the State Governments with an eligibility list. The
State Governments should fill up their quota for promotion to the IAS 6. (Para 5.9.6) The Union Public Service Commission
on the basis of this eligibility list. A maximum of two attempts should be
allowed to an eligible candidate for taking this examination. To ensure a. Promotion of officers through Departmental Promotion Committees
that the existing officers in the State Civil Services are not denied adequate (DPC), upto the level of Selection Grade may be delegated to the concerned
opportunities, the examination in the next two years may be conducted Departments. The UPSC should supervise the functioning of these DPCs
for all such eligible officers and the upper age limit of 40 years may be through periodic reviews, audit etc.
introduced, thereafter.
b. In the case of disciplinary proceedings, consultation with the UPSC should
be mandatory only in cases involving likely dismissal or removal of a
government servant.

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7. (Para 6.8) Capacity Building The governing bodies should be adequetely empowered to enable them to
discharge their functions efficiently.
a. Every government servant should undergo a mandatory training at the
induction stage and also periodically during his/her career. Successful i. A national institute of good governance may be set up by upgrading one
completion of these trainings should be a minimum necessary condition of the existing national/state institutes. This institute would identify,
for confirmation in service and subsequent promotions. Mandatory document, and disseminate best practices and also conduct training
induction trainings should be prescribed for Group D staff also before programmes.
they are assigned postings.
8. (Para 7.3.3) Recruitment at Group ‘B’ Level
b. A monitoring mechanism should be set up for overseeing the implementation
of the National Training Policy (1996). a. Each Department, dealing with both the general as well as specialized
Services (Group B), may set up committees to examine what changes are
c. The practice of having a ‘Common Foundation Course’ for all Group ‘A’ required in the system of recruitment and promotions to these posts. Prima-
Services – generalist, specialized and technical, should continue. For Group facie the Commission is of the view that in order to infuse fresh thinking, a
‘B’ and ‘C’ Services, the Institute of Secretarial Training and Management certain percentage of vacancies (say 25% every year) at the level of Section
(ISTM) may be developed as the nodal agency for design and delivery of Officer as well as for other specialized Group ‘B’ posts, should be filled
common Foundation Courses. through ‘Direct Recruitment’.

d. All civil servants should undergo mandatory training before each 9. (Para 7.5.7) Recruitment at Graduate Level (Group ‘B’ non-gazetted and Group ‘C’)
promotion and each officer/official should be evaluated after each training
programme. Successful completion of the training programmes should be a. The age limit for all positions (Group ‘B’ non-gazetted and Group ‘C’) –
made mandatory for promotions. requiring a graduate degree - should be 20-25 years for general candidates with
a relaxation of three years for OBC and five years for SC/ST and physically
e. The objective of mid-career training should be to develop domain challenged candidates.
knowledge and competence required for the changing job profile of the
b. The examination system should be based on a well designed objective type
officer. To this end, mid career learning opportunities relevant to specific
question paper.
domains or specializations should be made available for officers.
c. There is no need to conduct separate examinations for posts (Group ‘B’ non-
f. Public servants should be encouraged to obtain higher academic
gazetted and Group ‘C’) which require a graduate degree. There should be
qualifications and to write papers for reputed and authoritative journals.
a common examination and thereafter, the candidates should be allowed to
g. A strong network of training institutions at the Union and State levels apply for various posts with this examination score.
needs to be built up to cater to the training requirements of civil
10. (Para 7.6.6) Recruitment for LDCs
servants. However, instead of spreading resources over a large number of
institutions, a few institutions should be identified for capacity building a. The Commission endorses the stand taken by the Government that recruitment
and upgradation. of LDCs should be phased out.
h. The composition of governing bodies of the national training institutions b. In case it is felt necessary to recruit LDCs in certain organizations/departments,
such as the LBSNAA, SVPNPA, IGNFA and also the State Administrative especially in field offices, their recruitment should be done through the Staff
Training Institutes should be broadened by inducting eminent experts.

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Selection Commission. The existing recruitment process needs to be modified c. A mechanism of acknowledging the receipt of the ACR proforma at
on the following lines: various stages may be adopted so that delays are avoided and an element of
accountability is introduced.
i. The minimum qualification should be class 12th pass or equivalent.
13. ( Para 8.7) Placement at Middle Management Level
ii. The test should comprise of objective type questions.
a. In posting officers in Government of India, the primary consideration
iii. Short listed candidates should be administered a skills test. This should
should be to select the most suitable person for the post that is on offer.
be conducted on computers so that the capability of the candidates to
use word processing softwares is also assessed. b. Domains should be assigned by the Central Civil Services Authority (the
Commission has recommended the constitution of this Authority in
11. (Para 7.7.10) Training for Group ‘B’ and ‘C’ Employees
paragraph No 9.8 of this Report) to all officers of the All India Services
a. Unless a government employee undergoes mandatory induction training he/ and the Central Civil Services on completion of 13 years of service.
she should not be assigned any regular post.
c. The Central Civil Services Authority should invite applications from all
b. Successful completion of prescribed training courses should be a pre-condition officers who have completed the minimum qualifying years of service,
for all promotions. for assignment of domains. The applications should specify the academic
background of officers, their research accomplishments (if any) and
c. All training programmes should be concluded with an evaluation of the
significant achievements during their career, relevant to the domain applied
trainees’ performance, and this should be an input while assessing their annual
for. A consultative process should be put in place where the officers should
performance.
be interviewed and their claims to specific domains evaluated. The Authority
12. (Para 7.8.6) Group ‘B’ and ‘C’ Employees: Promotions should thereafter assign domains to the officers on the basis of this exercise.
In case some domains do not attract applicants, the Authority should assign
a. The posts of Assistants under the Central Secretariat Service should be filled these domains to officers with the relevant knowledge and experience.
in the ratio of 40 per cent by promotion from UDCs of Central Secretariat
Clerical Service Cadre, 40 per cent by Direct Recruitment and 20 per cent d. All vacancies arising at the level of Deputy Secretary/Director during a
through Limited Departmental Competitive Examination. financial year should be identified well before the beginning of that financial
year, by the Department of Personnel and Training (DOPT). The Ministries
13. (Para 7.9.6) Group ‘B’ and ‘C’ Employees: Performance Appraisal
concerned should also give a brief job description for these positions.
a. The Appraisal Form should provide the Reporting Officer with multiple All these posts and their job description should be notified to the cadre
options on the level of performance against which he/she would indicate controlling authorities of the concerned All India Services and Central
numerically the level at which the officer reported upon has performed. Services. On receipt of nominations from the cadre controlling authorities,
the DOPT should try to match the requirements of various positions with
b. The proforma of the Confidential Reports of Group B and C posts may include the competencies of the officers in the ‘offer list’. The DOPT should then
a column wherein the area/field of interest of the official reported upon (i.e.
seek approval for the entire list from the Competant Authority.
Health, Information Technology, Finance, Transport, Defence etc) is indicated,
which may be considered for future postings.

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e. The Central Civil Services Authority should be charged with the positions for which outside talent would be desirable. Applications
responsibility of fixing tenure for all civil service positions and this decision to fill up these posts would be invited from interested and eligible
of the Authority should be binding on Government. persons from the open market and also, from serving eligible
officers.
f. Officers from the organized services should not be given ‘non-field’
assignments in the first 8-10 years of their career. iii. While carrying out this exercise , the Central Civil Services Authority
would stipulate the eligibility criteria, the required domain expertise
g. State Governments should take steps to constitute State Civil Services as well as the requirements of qualifications, seniority and work
Authorities on the lines of the Central Civil Services Authority. experience. The Authority would conduct interviews to short-list
suitable officers for these posts. Government would make the final
14. (Para 9.8) Placement at Top Management Level selection on the basis of this shortlist.

a. The present empanelment system for short listing officers for posting at e. A Central Civil Services Authority should be constituted under the
a. The present empanelment system for short-listing officers for proposed Civil Services Bill. The Central Civil Services Authority shall
posting at the SAG level and above should be replaced by a more transparent be a five-member body consisting of the Chairperson and four members
and objective placement procedure. (including the member-secretary). The Authority should have a full time
Member-Secretary of the rank of Secretary to Government of India. The
b. At higher levels in government, it is necessary to ensure that the tasks Chairperson and members of the Authority should be persons of eminence
assigned to a public servant match his/her domain competence as well as in public life and professionals with acknowledged contributions to
aptitude and potential. society. The Chairperson and members of the Authority shall be appointed
c. Ministries should classify all of their SAG level posts according to their by the President on the recommendations of a Committee consisting of
relevant functional domains. the Prime Minister and the Leader of the Opposition in the Lok Sabha.
(Explanation:- Where the Leader of the Opposition in the Lok Sabha
d. There is need to introduce competition for senior positions in government has not been recognized as such, the Leader of the single largest group in
(SAG and above) by opening these positions in Government (including the Opposition in the Lok Sabha shall be deemed to be the Leader of the
attached and subordinate offices) to all Services. This principle would apply Opposition).
to all posts including those that are presently encadred with the organised
Group ‘A’ Services. In order to operationalise this, government should f. The Central Civil Services Authority should deal with matters of assignment
of domains to officers, preparing panels for posting of officers at the level
make the continued participation of any of the organised civil services in
of Joint Secretary and above, fixing tenures for senior posts, deciding on
the Central Staffing Scheme, contingent upon the implementation of this
posts which could be advertised for lateral entry and such other matters
principle in those Departments/Cadres.
that may be referred to it by the Government.
i. For the positions at the Joint Secretary/SAG level and above, the
g. A similar procedure should be adopted for filling up vacancies at SAG
Central Civil Services Authority would invite applications from
level and higher in the central police agencies. For example, in the Central
amongst all the eligible officers from the All India Services and
Para-Military Forces the senior positions should be opened to competition
Group ‘A’ Central Services which are participating in the scheme.
from officers of the CPMFs, IPS and the Armed Forces (including those
ii. For positions at the HAG level and above, the Central Public Service completing their Short Service Commissions). Similarly for the intelligence
Authority would, in consultation with Government, earmark agencies officers from the armed forces as well as the CPOs with experience

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in the field of intelligence should be considered for postings at higher levels Training modules for implementing performance management systems
in the intelligence agencies. should be designed and introduced for training programmes for civil
servants.
15. (Para 10.12) Deputation of Civil Servants to Organizations Outside
Government b. Government should expand the scope of the present performance appraisal
system of its employees to a comprehensive performance management
a. In drawing up the list of external organizations to which government system (PMS).
servants can be permitted to go on deputation, the primary consideration
should be the objectives and activities of such organizations and not merely c. In implementing PMS in government, it must be emphasized that the PMS
its organizational structure. For the present Government should permit should be designed within the overall strategic framework appropriate to
deputation of civil servants only to such organizations that are engaged the particular ministry/department/organization. It is also necessary to
in non-profit making activities. link individual contributions to strategic objectives of the organization.
It will therefore be necessary for each ministry/department/organization
b. This policy may be reviewed after three years. to customize its PMS relevant to them, while incorporating the general
features described in Chapter 11.
16. (Para 11.15) Performance Management System
d. Annual performance agreements should be signed between the departmental
a. A good employee performance appraisal system is a pre-requisite for an
minister and the Secretary of the ministry/heads of departments, providing
effective performance management system. The existing performance
physical and verifiable details of the work to be done during a financial
appraisal system should be strengthened on the following lines:
year. The actual performance should be assessed by a third party – say,
Making appraisal more consultative and transparent - performance the Central Public Services Authority – with reference to the annual
appraisal systems for all Services should be modified on the lines of the performance agreement. The details of the annual performance agreements
recently introduced PAR for the All India Services. and the result of the assessment by the third party should be provided to
the legislature as a part of the Performance Budget/Outcome Budget.
Performance appraisal formats to be made job specific - the appraisal
format prescribed for civil servants should have three sections i.e. (i) a 17. (Para 12.5) Motivating Civil Servants
generic section that meets the requirements of a particular service to
a. There is need to recognise the outstanding work of serving civil servants
which the officer belongs, (ii) another section based on the goals and
including through National awards. Awards for recognizing good
requirements of the department in which he/she is working, and (iii)
performance should also be instituted at the State and district levels. It
a final section which captures the specific requirements and targets
must be ensured that selection for such awards is made through a prompt,
relating to the post that the officer is holding.
objective and transparent mechanism because the value of such awards
Performance appraisal should be year round: provisions for should not get compromised by either subjectivity or lack of transparency.
detailed work-plan and a mid-year review should be introduced for Further, all organizations should evolve their own in-house mechanism for
all Services. rewarding good performance from simple, verbal and written appreciation
to more tangible rewards.
Guidelines need to be formulated for assigning numerical rating:
DOPT should formulate detailed guidelines to guide the reporting and b. Selections for foreign assignments referred to in Paragraph 12.4.3.2
reviewing officers for assigning numerical ratings for their subordinates. should be made, based on the recommendations of the Central Civil
Services Authority. The Authority should follow the due process of inviting
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applications from eligible candidates and preparing a panel of officers who to be conducted by a superior officer in a summary manner without
are most suitable for such assignments. the trappings and procedures borrowed from court trials. This would
require that the CCS (CCA) Rules, 1965 be repealed and substituted by
c. It should be the responsibility of the head of the office to examine the job appropriate regulations.
content of each person working in the organization to ensure that the job
content is meaningful and challenging so that the employee derives a sense b. No penalty of removal and dismissal should be imposed, except by an
of satisfaction in performing the tasks assigned to him/her. The head of the Authority, which is at least three levels above the post which the government
office could seek the assistance of a professional agency for this purpose. servant is holding. Other penalities – apart from dismissal and removal
– may be imposed by an Authority which is at least two levels above the
d. Each head of office should ensure that a congenial work environment current post of the government servant. No penality may be imposed,
is created in the office. His/her success in this should be an element in unless an inquiry is conducted and the accused government servant has
evaluating his/her performance. been given an opportunity of being heard.
18. (Para 13.4) Accountability c. The two-stage consultation with the CVC in cases involving a vigilance
angle should be done away with and only the second stage advice after
a. A system of two intensive reviews – one on completion of 14 years of service,
completion of the disciplinary process, should be obtained. In addition,
and another on completion of 20 years of service - should be established
for cases involving a vigilance angle, no consultation with the UPSC should
for all government servants.
be required.
b. The first review at 14 years would primarily serve the purpose of intimating
d. Consultation with the UPSC should be mandatory only in cases leading
to the public servant about his/her strengths and shortcomings for his/
to the proposed dismissal of government servants and all other types of
her future advancement. The second review at 20 years would mainly
disciplinary cases should be exempted from the UPSC’s purview.
serve to assess the fitness of the officer for his/her further continuation
in government service. The detailed modalities of this assessment system 20. (Para 15.6) Relations between the Political Executive and Civil Servants
would need to be worked out by government.
a. There is a need to safeguard the political neutrality and impartiality of the
c. The services of public servants, who are found to be unfit after the second civil services. The onus for this lies equally on the political executive and
review at 20 years, should be discontinued. A provision regarding this should the civil services. This aspect should be included in the Code of Ethics for
be made in the proposed Civil Services Law. Besides, for new appointments Ministers as well as the Code of Conduct for Public Servants.
it should be expressly provided that the period of employment shall be for
20 years. Further continuance in government service would depend upon b. The Commission would like to reiterate its recommendation made in
the outcome of the intensive performance reviews. its Report on “Ethics in Governance” while examining the definition of
corruption under the Prevention of Corruption Act, 1988, wherein it has
19. (Para 14.6) Disciplinary Proceedings been recommended that “abuse of authority unduly favouring or harming
someone” and “obstruction of justice” should be classified as an offence
a. In the proposed Civil Services law, the minimum statutary disciplinary
under the Act.
and dismissal procedures required to satisfy the criteria of natural justice
should be spelt out leaving the details of the procedure to be followed c. It is essential to lay down certain norms for recruitment in government to
to the respective government departments. The present oral inquiry avoid complaints of favouritism, nepotism, corruption and abuse of power.
process should be converted into a disciplinay meeting or interview These norms are:
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 Refurbishing of Personnel Administation – Scaling New Heights Summary of Recommendations

i. Well-defined procedure for recruitment to all government jobs. iii. Objectivity

ii. Wide publicity and open competition for recruitment to all posts. iv. Dedication to public service

iii. Minimisation, if not elimination, of discretion in the recruitment v. Empathy towards weaker sections
process.
The Heads of Departments shall be responsible for promoting these values in
iv. Selection primarily on the basis of written examination or on the their organizations. The Central Civil Services Authority may from time to time
basis of performance in existing public/board/university examination review the adoption, adherence to and implementation of the Civil Service Values
with minimum weight to interview. in the departments or organizations under the Union.

These principles could be included in the ‘Civil Services Bill’ as IV. Code of Ethics: The following should be included in the Code of Ethics for
recommended by the Commission in Chapter 17. civil servants:

21. (Para 16.17) Civil Services Code i. Integrity: Civil servants should be guided solely by public interest
in their official decision making and not by any financial or other
a. ‘Civil Services Values’ and the ‘Code of Ethics’ should be incorporated in consideration either in respect of themselves, their families or their
the proposed Civil Services Bill. friends.
b. Conduct Rules for civil servants need to be redrawn based on the values ii. Impartiality: Civil servants in carrying out their official work,
and code of ethics as outlined in this Chapter (Chapter 16). including functions like procurement, recruitment, delivery of
services etc, should take decisions based on merit and free from any
22. (Para 17.5) The Civil Services Law
partisan consideration.
A new Civil Services Bill may be drafted. The following salient features may be included
iii. Commitment to public service: civil servants should deliver services
in the proposed Bill:
in a fair, effective, impartial and courteous manner.
I. Title of the Bill: The Bill may be called ‘The Civil Services Bill’.
iv. Open accountability: civil servants are accountable for their decisions
II. Definitions: “Civil Services” shall comprise of all personnel holding civil and actions and should be willing to subject themselves to appropriate
posts under the Union. scrutiny for this purpose.

III. Civil Service Values: The Civil Services and the Civil Servants shall be v. Devotion to duty: civil servants should maintain absolute and
guided by the following values in addition to a commitment to uphold unstinting devotion towards their duties and responsibilities at all
the Constitution, the discharge of their functions: times.

i. Absolute integrity at all times vi. Exemplary behaviour: civil servants should treat all members of the
public with respect and courtesy and at all times should behave in a
ii. Impartiality and non-partisanship manner that upholds the rich traditions of the civil services.

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V. Recruitment and Conditions of Service: Recruitment and conditions of also evaluate the future potential of an officer. The Central Civil Services
service of persons appointed to the ‘Public Services’ shall be governed by Authority should recommend a panel of officers suitable for a position in
Rules made under this Act. The following principles of recruitment should the Government and Government should choose an officer/person from
be included for all appointments not routed through the UPSC or SSC: this panel.

i. Well-defined merit based procedure for recruitment. VIII. Fixation of Tenures: All senior posts should have a specified tenure. The task
of fixing tenures for various posts may also be assigned to this independent
ii. Wide publicity and open competition for recruitment to all posts. agency - Central Civil Services Authority.
iii. Minimisation, if not elimination, of discretion in the recruitment IX. Widening the Pool of Candidates for Selection to Senior Positions:
process. Candidates outside the government system should be allowed to compete
for certain posts at senior levels (Additional Secretary and above). The task
iv. Selection primarily on the basis of written examination or on the
of identifying these posts should be entrusted to the Central Civil Services
basis of performance in existing public/board/university examination
Authority.
with minimum weight-age to interview.
X. Dismissal, Removal etc. of Civil Servants: After the repeal of Articles 310 and
An independent agency should audit the recruitments made outside the UPSC
311 (as recommended in the Report on ‘Ethics in Governance’), safeguards
and SSC systems and advise the government suitably. This audit should be
against arbitrary action against government servants should be provided
conducted under the supervision of the UPSC.
in the new law. These safeguards should include:
VI. New Conditions of Appointment: (1) A civil servant, not being a civil servant
i. No penalty of removal and dismissal should be imposed, except by
recruited or inducted for a short-term appointment, shall hold office for
an authority, which is at least three levels above the post which the
twenty years from the date of initial appointment. (2) The relationship
government servant is holding.
between the Civil Servant and the Government of India during the time he/
she holds office shall also be governed by the rules made in this regard. All ii. Other penalties – apart from dismissal and removal - may be imposed
public servants shall be subjected to two intensive reviews on completion by an authority which is at least two levels above the current post of
of 14 years and 20 years of service respectively. Their further continuance the government servant.
beyond 20 years will depend on the outcome of these reviews. It should
be expressly provided that all new recruitments shall be for a period of iii. No penalty may be imposed, unless an enquiry is conducted and the
20 years and their continuance beyond 20 years would depend on the accused government servant has been given an opportunity of being
outcome of the intensive reviews. heard.

VII. Appointment to Senior Positions in Government: All positions in iv. The Head of an organization should have powers to lay down the
Government (including in the attached and subordinate offices) at the level of details of the enquiry procedure, subject to the general guidelines
Joint Secretary and above would constitute the ‘Senior Management which may be issued by the Government from time to time.
Pool’. This would apply to all posts including those that are presently
encadred with the organised Group A Services. All appointments to XI. A performance management system should be mandatory for every
positions in this pool shall be made on the recommendations of the Central organization in the government.
Civil Services Authority, which would go into the past performance and
XII. Constitution of the Central Civil Services Authority:

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i. The Central Government shall, by notification in the Official Gazette, vi. Fix the tenure for posts at the ‘Senior Management Level’ in
constitute a body to be known as the Central Civil Services Authority Government of India.
to exercise the powers conferred on, and to perform the functions
assigned to it, under this Act. vii. Submit an annual report to Parliament.

ii. The Central Civil Services Authority shall be a five-member body XIV. Creation of Executive Agencies in Government: Government should be
consisting of the Chairperson and four members (including the authorized to create or reorganize some or all of existing Departments
member-secretary). The Authority should have a full time Member- into ‘Executive Agencies’. The role of the Ministries should primarily be on
Secretary of the rank of Secretary to Government of India. The policy formulation while implementation should be left to the Executive
Chairperson and members of the Authority should be persons Agencies.
of eminence in public life and professionals with acknowledged
contributions to society. The Chairperson and members of the
Authority shall be appointed by the President on the recommendations
of a Committee consisting of the Prime Minister and the Leader of
the Opposition in the Lok Sabha. (Explanation:- Where the Leader
of the Opposition in the Lok Sabha has not been recognized as such,
the Leader of the single largest group in the opposition in the Lok
Sabha shall be deemed to be the Leader of the Opposition).

XIII. Functions of the Central Civil Services Authority: The Central Authority
shall discharge the following functions:

i. Review the adoption, adherence to and implementation of the Civil

Service Values in the departments or organizations under the Central
Government and send reports to the Central Government.

ii. Assign domains to all officers of the All India Services and the Central
Civil Services on completion of 13 years of service.

iii. Formulate norms and guidelines for appointments at ‘Senior

Management Level’ in Government of India.

iv. Evaluate and recommend names of officers for posting at the ‘Senior
Management Level’ in Government of India.

v. Identify the posts at ‘Senior Management Level’ in Government

of India which could be thrown open for recruitment from all
sources.

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 ELEVENTH REPORT

SECOND ADMINISTRATIVE REFORMS COMMISSION CONCLUSION

10.1 In this Report on e-Governance, the Commission has examined various aspects of
e-Governance reforms in India. The Commission is of the view that even in any e-Governance
initiative, the focus has to be on governance reforms with the technological tools provided by
ICT being utilized to bring about fundamental changes in the governmental processes.

10.2 In view of the wide range of e-Governance initiatives that have been carried out in
PROMOTING eGOVERNANCE India with varying degrees of success as well as the diversity of conditions in the country, the
Commission recognizes that e-Governance projects have to be designed for specific contexts
The SMART and environments. The Commission has analyzed the progress made as well as the lack of
Way Forward progress in several e-Governance initiatives including some components of the NeGP. It has
tried to glean out from such experiences, certain general principles, cross-cutting issues and
key constraints that are likely to be relevant for e-Governance projects in the country.

10.3 Some of these core principles include a clear understanding and appreciation of the
objectives to be achieved through e-Governance, making governance reforms rather than ICT
the key focus for these projects, a step-by-step approach to maximum outcomes and benefits,
complete re-engineering of government systems and procedures, constant monitoring and
evaluation, and use of local languages for ensuring citizen-friendly interface.

10.4 The Commission notes that India’s e-Governance experience shows a plethora of pilot
projects with varying rates of success but with the common characteristic that the majority
of them are not up-scaled or widely replicated. The Commission feels that it is essential to
learn from such experiences and each pilot project should be taken to its logical end. For
this to happen, emphasis has to be on the reforms in government procedures, structures
and systems and must take precedence over mere technological solutions.

10.5 Ultimately, the success of an e-Governance initiative lies in how efficiently it has
enhanced people’s participation in government functioning through wide ICT access,
bringing government and the services it offers closer to its citizens, promoting accountability,
transparency and responsiveness in government functioning and ensuring that government
works better at lesser costs. These are the sine qua non for good governance and a vibrant
democracy.
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 Promoting e-Governance – The SMART Way Forward

iv. Initiatives which require verification of information/data submitted

online.

v. Initiatives which require creation and integration of complex

SUMMARY OF RECOMMENDATIONS databases.

b. Instead of implementing all such initiatives at one go, these should be

implemented after prioritizing them on the basis of ease of implementation,
1. (Para 6.2.2) Building a Congenial Environment which would generally follow the categories mentioned above in that order.
However, suitable modifications in their prioritization may be made by
a. Building a congenial environment is a sine qua non for successful
organizations/departments on the basis of the needs of and likely impact
implementation of e-Governance initiatives. This should be achieved by:
on citizens.
i. Creating and displaying a will to change within the government
c. Respective Departments of Information Technology at the Union and
ii. Providing political support at the highest level State Government levels should coordinate between organizations and
provide technical support if needed, in the task of identification and
iii. Incentivising e-Governance and overcoming the resistance to change prioritisation.
within government
3. (Para 6.4.16) Business Process Re-engineering
iv. Creating awareness in the public with a view to generating a demand
for change. a. For every function a government organisation performs and every service
or information it is required to provide, there should be a step-by-step
2. (Para 6.3.9) Identification of e-Governance Projects and Prioritisation analysis of each process to ensure its rationality and simplicity.

a. Government organizations/departments at Union and State Government b. Such analysis should incorporate the viewpoints of all stakeholders, while
levels need to identify e-Governance initiatives which could be undertaken maintaining the citizen-centricity of the exercise.
within their functional domain, keeping the needs of the citizens in mind.
Such initiatives may be categorized as follows: c. After identifying steps which are redundant or which require simplification,
and which are adaptable to e-Governance, the provisions of the law, rules,
i. Initiatives which would provide timely and useful information to the regulations, instructions, codes, manuals etc. which form their basis should
citizens. also be identified.

ii. Initiatives which would not require the creation of a database for d. Following this exercise, governmental forms, processes and structures
providing useful services to the citizens. This may include initiatives should be re-designed to make them adaptable to e-Governance, backed
where database may be created prospectively without waiting for the by procedural, institutional and legal changes.
updation of historical data.

iii. Initiatives which allow for making elementary online transactions

including payment for services.

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 Summary of Recommendations Promoting e-Governance – The SMART Way Forward

4. (Para 6.5.22) Capacity Building and Creating Awareness ii. Promote the use of ‘enterprise architecture’ in the successful
implementation of e-Governance initiatives; this would require
a. Capacity building efforts must attend to both the organizational capacity building capacity of top level managers in all government
building as also the professional and skills upgradation of individuals organizations.
associated with the implementation of e-Governance projects.
6. (Para 6.7.2.7) Implementation
b. Each government organization must conduct a capacity assessment which
should form the basis for training their personnel. Such capacity assessment a. All organizations should carry out a periodic independent evaluation of
may be carried out by the State Department of Information Technology the information available on their websites from the citizens perspective
in case of State Governments, and the Union Department of Information and then re-design their websites on the basis of the feedback obtained.
Technology in the Centre. Organisations should prepare a roadmap for
enhancing the capabilities of both their employees and the organization. b. Each government organization should prepare a time-bound plan for
providing of transactional information through their websites. To begin
c. A network of training institutions needs to be created in the States with the with, this could be done by updating the websites at regular intervals, while
Administrative Training Institutes at the apex. The Administrative Training at the same time, re-engineering the back-end processes and putting them
Institutes in various States should take up capacity building programmes on computer networks. Ultimately, all the back-end processes should be
in e-Governance, by establishing strong e-Governance wings. ATIs need computerized.
to be strengthened under the NeGP.
c. Complex e-Governance projects should be planned and implemented like
d. State Governments should operationalise the Capacity Building Roadmap any major project having several parts / components for which Project
(CBRMs), under the overall guidance and support of the DIT, Government Management capability should be developed in-house.
of India.
d. Implementation of e-Governance projects would involve a detailed ‘project
e. Lessons learnt from previous successful e-Governance initiatives should be management’ exercise which would consist of the following activities:
incorporated in training programmes.
i. Breaking up entire e-Governance projects into components/
f. The recommendations made by the Commission in its Second Report activities
entitled ‘Unlocking Human Capital’ in paragraph (5.2.1.6) should be
adopted for creating awareness among people with regard to e-Governance ii. Planning each activity in detail
initiatives.
iii. Allocating resources, both human and financial
5. (Para 6.6.2.10) Developing Technological Solutions
iv. Commencement of activities as per the plan and continuous
a. There is a need to: tracking

i. Develop a national e-Governance ‘enterprise architecture’ framework v. Need-based mid-course correction

as has been done in some countries.
e. While implementing transformational programmes like the NeGP, it
is essential to recognise of the importance of a structured approach to
Change Management – the people side of transformation. It is necessary for
Government agencies, especially the nodal Ministries and the Administrative
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 Summary of Recommendations Promoting e-Governance – The SMART Way Forward

Reforms and IT Departments, to design appropriate Change Management 9. (Para 6.10.6) Public-Private Partnership (PPP)
Strategies and Plans to accompany the e-Governance implementation.
a. Several components of e-Governance projects lend themselves to the
7. (Para 6.8.3) Monitoring and Evaluation Public-Private Partnership (PPP) mode. In all such cases (PPP) should
be the preferred mode.
a. Monitoring of e-Governance projects should be done by the implementing
organization during implementation in the manner in which project b. The private partner should be selected through a transparent process.
monitoring is done for large infrastructure projects. Even after the project The roles and responsibilities of government as well as the private partner
has been implemented, constant monitoring would be required to ensure should be clearly laid down in the initial stage itself, leaving no room for
that each component is functioning as per the design. any ambiguity.

b. Evaluation of success or failure of e-Governance projects may be done by 10. (Para 6.11.2) Protecting Critical Information Infrastructure Assets
independent agencies on the basis of parameters fixed beforehand.
a. There is need to develop a critical information infrastructure assets
8. (Para 6.9.5) Institutional Framework for Coordination and Sharing of Resources/ protection strategy. This should be supplemented with improved analysis
Information and warning capabilities as well as improved information sharing on threats
and vulnerabilities.
a. The Departments of Information Technology at the Union and State
Government levels should provide institutional support to other 11. (Para 7.3.2.3.16) The Common Support Infrastructure
departments and organizations in implementation of e-Governance
projects identified and conceptualized by them. The DIT should focus on a. As recommended by the Standing Committee on Information Technology
the following: in its 58th Report, the State Data Centres (SDCs) should be maintained
by Government agencies such as NIC as it involves handling of sovereign
1. Conducting an e-preparedness audit for each organization data. Further, all data centres at the State level should be subsumed in the
SDCs.
2. Enforcing standardization
b. The implementation of SDCs, SWANs and CSCs should be co-ordinated
3. Assisting in co-ordination when e-Governance projects transcend an to prevent significant time-lag between their operationalisation. Last mile
organisation’s functional domain connectivity issues involved in operationalisation of CSCs should also be
addressed in a time-bound manner.
4. Carrying out evaluation of e-Governance projects
c. Gram Panchayats should be involved in monitoring the operation of
5. Acting as a repository of best practices and encouraging horizontal
the Common Services Centres in the first four years of their operation
replication of successful projects
when they are receiving revenue support from government for providing
6. Helping in selection of technological solutions. ‘Government to Citizen’ services. They should proactively engage in making
citizens aware of the services provided through the CSCs and encourage
b. The Second Schedule to the Government of India Allocation of Business them to make use of them.
Rules, 1961 may be suitably amended to incorporate these elements with
regard to the subject matter of ‘e-Governance’. d. State Governments should make available a large bouquet of G2C
services through the CSCs. In doing so, they should adopt the approach

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 Summary of Recommendations Promoting e-Governance – The SMART Way Forward

outlined in this Report while discussing identification and prioritization 13. (Para 7.3.4.1.23) Mission Mode Project on Computerisation of Land Records
of e-Governance projects.
a. Surveys and measurements need to be carried out in a mission mode
e. The Mission Mode Project on Gram Panchayats should be finalized and utilizing modern technology to arrive at a correct picture of land holdings
implemented in a time-bound manner. The MMP should incorporate the and land parcels and rectification of outdated maps.
recommendations made by the Commission in its Sixth Report entitled
‘Local Governance’, in paragraphs 3.10.2.8 and 4.5.5.6. b. This needs to be accompanied by an analysis of the existing mechanism for
updating land records – which varies from State to State – to be supplanted
12. (Para 7.3.3.8) Mission Mode Projects by an improved and strengthened mechanism which ensures that all future
transactions in titles are immediately reflected in the land records. Such a
a. State Governments should first provide a clear mandate for governance system should be able to detect changes in titles through various means –
reforms that must precede the e-Governance initiatives. This would namely, succession, will, partition, gift, survivorship etc and update records
involve, if necessary, changing procedures and even structures and statutes. accordingly.
Therefore as a first step, these issues need to be analysed, decision points
identified and political approval taken. c. The dispute resolution mechanism with regard to land titles needs to be
strengthened in order to be compatible with the demands made on it.
b. The major decisions involved in (a) above should be identified by the State d. In case of urban areas, a similar exercise needs to be undertaken especially
Level Apex Committee and approval of the State Government obtained since measurements and surveys have not been done in many of such areas
within six months. and even record of titles is not available in most cities.

c. The Secretaries of the concerned departments should be entrusted with 14. (Para 7.3.4.2.7) Passport & Visa MMP
the responsibility of project implementation in unambiguous terms. They a. The entire passport issue process needs to be put on an e-Governance mode
should be provided with the requisite authority and resources for project in phases. As the processes which precede and follow the police verification
implementation. have already been re-engineered and put in e-Governance mode, this may
be integrated with online police and citizen identification data bases. In
d. Thereafter, the business process re-engineering and capacity building the mean time, the process of police verification should be streamlined
exercise should be completed by the concerned department within a and made time bound.
maximum period of one year. The IT component of these projects should
not be funded until this step is completed. 15. (Para 7.3.4.3.12) Unique National Identity Number/Card

a. The proposed Unique ID Authority should evolve a database of

e. The Annual Performance Appraisal Report (APR) of public servants UIDs on the basis of permanent identifiers such as date of birth, place of
entrusted with the responsibility of project implementation under NeGP birth etc. as described in paragraph 7.3.4.3.11.
should have a separate entry for evaluation of their performance in this
regard. 16. (Para 8.2) Legal Framework for e-Governance

a. A clear road map with a set of milestones should be outlined by Government

of India with the ultimate objective of transforming the citizen-government

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 Summary of Recommendations

interaction at all levels to the e-Governance mode by 2020. This may be

enshrined in a legal framework keeping in consideration the mammoth GOVERNMENT OF INDIA
dimension of the task, the levels of required coordination between the
Union and State Governments and the diverse field situations in which it
would be implemented.

b. The legal framework should, inter alia, include provisions regarding:

i. Definition of e-Governance, its objectives and role in the Indian

context;
SECOND ADMINISTRATIVE REFORMS COMMISSION
ii. Parliamentary oversight mechanism;

iii. Mechanism for co-ordination between government organizations at

Union and State levels;

iv. Role, functions and responsibilities of government organizations

with regard to e-Governance initiatives, especially business process
re-engineering;
TWELFTH REPORT
v. Financial arrangements;

vi. Specifying the requirements of a strategic control framework for

e-Government projects dealing with the statutory and sovereign
functions of government;

vii. Framework for digital security and data protection; and

viii. Responsibility for selection and adoption of standards and inter- CITIZEN CENTRIC ADMINISTRATION
operability framework.

c. This legislation should have an overarching framework and be able to

provide flexibility to organizations.

17. (Para 9.5) Knowledge Management

a. Union and State Governments should take proactive measures for

establishing Knowledge Management systems as a pivotal step for FEBRUARY 2009
administrative reforms in general and e-Governance in particular.

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 Conclusion

addition, suggested various measures for revamping the grievances redressal mechanisms in
government departments. The role of special institutional mechanisms such as the various
national and state commissions for protection of vulnerable groups has also been examined
and measures suggested for improving their functioning.
CONCLUSION
In conclusion, the Commission would like to reiterate that the aforesaid measures will
need to be implemented in conjunction with the various recommendations made in the
Citizen centricity is the essence of any vibrant democracy and is inextricably linked to good Commission’s other Reports.
governance. Good governance basically means creating an environment in which all classes
of citizens can develop to their fullest potential. It also means provision of public services
in an efficient and equitable manner to citizens.

In India, the Constitution lays the foundation for promotion of citizen centric governance.
It provides for fundamental rights that are the hallmark of our democracy and mandates
the welfare of all citizens through a set of Directive Principles. Based on the principles
enshrined in the Constitution, India has developed an elaborate legal and institutional
framework for ensuring good governance to its citizens.

The Commission’s primary mandate is to suggest measures for achieving a proactive,

responsive, accountable, sustainable and efficient administration for the country at all levels
of government. The objective of promoting citizen centric administration has, therefore,
been a central focus of all the Reports submitted so far by the Administrative Reforms
Commission (ARC).

In this Report, the Commission has emphasized on governance processes that can make
administration more citizen oriented. The strategies highlighted in the Report can be
conceptualized as demand side strategies and supply side strategies. While the demand side
strategies are geared to giving citizens’ groups a greater role in governance, the supply side
strategies aim to reorient government organizations to make them more efficient, effective
and participative.

The Commission has therefore looked at various mechanisms for making administration
more responsive to citizens. Thus the concept of citizens’ charter as a tool for promotion
of greater efficiency and accountability has been examined in detail. Further, processes and
mechanisms for promotion of citizens’ participation in administration have been suggested.
The Commission has also emphasized simplification of processes along with de-centralization
and delegation to make administration more accessible to citizens. The Commission has, in

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 Summary of Recommendations

ii. Citizens’ Charter should be prepared for each independent unit under
the overall umbrella of the organisations’ charter.

iii. Wide consultation which include Civil Society in the process.

SUMMARY OF RECOMMENDATIONS
iv. Firm commitments to be made.

v. Internal processes and structure should be reformed to meet the

1. Functions of Government commitments given in the Charter.

(Para 3.3.4) vi. Redressal mechanism in case of default.

a. Government organisations should adhere to the principles highlighted in vii. Periodic evaluation of Citizens’ Charters.
paragraph 3.2.4 while performing regulatory functions.
viii. Benchmark using end-user feedback.
b. Government agencies, whether regulatory or developmental, should
introduce the Single Window Agency concept within their organisations ix. Hold officers accountable for results.
to minimize delays and maximize convenience to citizens. Government as
a whole should draw a roadmap with timelines for expeditious creation of 3. (Para 4.9.9) The ARC Seven-Step Model for Citizen Centricity
a single window at the local level for provision of all developmental and
a. The Union and State Governments should make the seven-step model
regulatory services to citizens.
outlined in paragraph 4.9, mandatory for all organizations having public
(Para 3.4.2) interface.

a. The principle of subsidiarity should be followed while deciding on the 4. (Para 5.7.4) Citizen’s Participation in Administration
implementation machinery for any programme.
a. It should be mandatory for all government organizations to develop a
b. Citizens should be actively involved in all stages of these programmes i.e. suitable mechanism for receipt of suggestions from citizens, which could
planning, implementation and monitoring. range from the simple ‘Suggestion Box’ to periodic consultations with
citizens’ groups. Heads of the concerned organizations should ensure
c. Mandatory social audit should be carried out for all progrmames. rigorous follow up action on the suggestions received so that these become
a meaningful exercise. A system of incentives and rewards should be
d. Impact assessment should be carried out for all programmes at periodic introduced so that suggestions that lead to significant improvement or
intervals. savings can be acknowledged.

2. (Para 4.6.10) Making Citizens’ Charters Effective – An Agenda for Reform b. Every government organization must ensure the following: (i) fool-proof
system for registration of all complaints, (ii) a prescribed time schedule for
Citizens’ Charters should be made effective by adopting the following response and resolution, and (iii) a monitoring and evaluation mechanism
principles: to ensure that the norms, prescribed are complied with. Use of tools of
i. One size does not fit all. information technology can help to make such a system more accessible for
citizens. Heads of all government organizations should be made responsible

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 Citizen Centric Administration – Summary of Recommendations

for ensuring the development of such a system for responding to a time c. Government should adopt a more proactive approach for detection and
bound resolution of the complaints of citizens. registration of the physically challenged persons.

c. Regular citizens’ feedback and survey and citizens’ report cards should be d. To achieve this, responsibility should be cast on the Primary Health
evolved by all government organisations for gauging citizens’ responses to Centres (PHCs) to identify all such cases in their jurisdiction and to get the
their services. These should be used as inputs for improving organizational evaluation of the disabilities done. To enable the PHCs to discharge these
efficiency. responsibilities, adequate resources should be placed at the disposal of the
Medical Officer, PHC along with delegation of commensurate authority
d. While no single modality or mechanism can be prescribed for encouraging and changes in the relevant rules.
citizens’ participation in governance; in general, there is need to create
institutionalized mechanisms for encouraging their participation in e. Organization of camps at PHC level, attended by the concerned medical
governance across public agencies at all levels and, for this to happen, the personnel, would greatly help in issuing certificates of disability on the
following steps are necessary: spot.
i. A comprehensive review of policy and practice in each department/ f. Further, steps should be taken to create a database for all the Disabilities
public agency. Certificate holders with integration at District, State and National levels.
ii. Modifying administrative procedures where necessary. 6. (Para 6.8) Delegation
iii. Entrustment of the function of institutionalizing citizens’
a. Based on the principle of subsidiarity, each government organization should
participation in governance to a senior level officer.
carry out an exercise to assess whether adequate delegation of authority has
iv. Performance management reviews to incorporate effectiveness in been done. In doing so, it should be clearly enunciated that the top levels
ensuring citizens’ participation in governance. of the organization should essentially focus on policy making functions
and the field level functionaries should focus on operational aspects.
e. The objective could also be served by active and cooperative participation
by government agencies in civil society initiatives in the area of citizens’ b. The extent to which delegated powers is used or is allowed to be used, should
participation in grievance redressal. be two of the elements while appraising an officer’s overall performance.
5. (Para 5.10) Participation of Women and the Physically Challenged 7. (Para 7.9.3.3) Evolving an Effective Public Grievances Redressal System
a. Ensuring the full participation of women should be a specific aim of citizen a. There is need for a strong and effective internal grievance redressal
centric administration and this should be reflected in various policies mechanism in each organization.
and programmes, including citizens’ charters and grievances redressal
mechanisms. b. The Union and State Governments should issue directions asking all
public authorities to designate public grievance officers on the lines of
b. Government may constitute an expert committee to identify the areas the Public Information Officers under the RTI Act. These officers
where special provisions for the physically challenged should be made should be of adequate seniority and should be delegated commensurate
mandatory. These areas could be reviewed and expanded every five years. authority.

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 Citizen Centric Administration – Summary of Recommendations

c. All grievance petitions received should be satisfactorily disposed of by these iv. The outcome of all inspections must be immediately put in the public
officers within thirty days. Non-adherence to the time limit should invite domain.
financial penalties.
v. There should be an annual audit of the licensing and inspection
d. Each organization should designate an appellate authority and devolve system each year by an independent agency.
adequate powers upon them including the power to impose fines on the
defaulting officers. vi. All licensing authorities should evolve an accessible system for receipt
of citizens’ complaints.
8. (Para 7.10.3) Analysis and Identification of Grievance Prone Areas
10. (Para 9.10.4) Special Institution Mechanisms
a. Government organizations should analyse the complaints received and
identify the areas wherein interventions would be required so as to eliminate a. A common format for making complaints before various statutory
the underlying causes that lead to public grievances. This exercise should Commissions should be devised in consultation with each other. This
be carried out at regular intervals. format should capture the details of the victims and complainants in such
a way that it facilitates matching of data across different Commissions.
9. (Para 8.3.3) Consumer Protection In case of complaints filed without the use of the common format, the
a. Lok Adalats would be effective in settling many consumer disputes. It necessary fields may be filled up at the time of registration of cases itself
should be stipulated by law that cases up to a particular value, say Rupees by the Commission receiving the complaint.
two lakhs, should first be referred to Lok Adalats.
b. As recommended in paragraph 6.3.9 of the Commission’s Eleventh Report
b. All Ministries/Departments need to examine the procedures regulating entitled ‘Promoting e-Governance: the SMART Way Forward’, each
grant of licenses, permissions or registration including the underlying statutory Commission should create an electronic database prospectively
Acts, Rules, Notifications, etc. These should be recast with the following and each database should be networked with each other to facilitate
underlying principles: comparison of data.

i. There should be an upper time limit for grant of any license/ c. The Human Rights Commission {as defined in Section 3(3), PHRA}
permission/registration. The law should provide for penalties if an should lay down norms to deal with complaints by the most appropriate
application is not disposed of within the stipulated period. Commission. The basic principle could be that the dominant grievance in
a complaint should lead to its handling by the appropriate Commission.
ii. Applications should be processed only on a ‘First in First out Basis’.
All applications received and pending should be put on the licensing Nodal officers may be appointed in each Commission to identify and
authority’s website. coordinate action over such cases. Internal mechanisms should be evolved
within each statutory Commission to facilitate the handling of such cases
iii. Selecting units for surprise inspection should not be left to the in a coordinated manner.
discretion of the inspecting officers. Each office should devise
an objective procedure to randomly select units for inspection. d. The Union and State Governments should take proactive steps in dealing
Exceptions can be made in case of receipt of genuine complaints with serious offences like custodial deaths/rapes etc on priority so that
against any unit.

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 Citizen Centric Administration – Summary of Recommendations

their occurrence diminishes over the years. Help of NHRC may be taken b. Structural change should be an integral part of any process simplification
to prepare an action plan for this purpose. exercise.

e. In the smaller States, a single ‘multi-role’ Commission may be constituted 12. (Para 10.4.4) Monitoring and Evaluation
which would carry out the specific functions of all the constitutional and
a. The feedback from citizens should be used to monitor the performance of
statutory Commissions at the State level.
government offices.
f. A separate Standing Committee of Parliament may be constituted to look
b. Each government office which has public interface should have an external
into Annual Reports submitted by these statutory Commissions. evaluation conducted annually in addition to those conducted by the
11. (Para 10.1.9) Simplifying Internal Procedures organization itself.

a. All Ministries/Departments should prepare a roadmap for carrying out 13. (Para 10.5.1.11) Rationalising Procedures
a process simplification exercise. This should involve changes in Rules, a. Ministry of Road Transport and Highways should constitute an expert
Regulations and Laws wherever necessary. The entire exercise should be group to devise practical and objective tests of competence for issue of
completed within two years. Similarly, the Ministries/Departments should driving licenses.
instruct all organizations under their supervision to carry out this task.
State Governments should also be advised accordingly. This elaborate b. The conduct of these practical tests as well as the one prescribed for learner’s
exercise would involve the following steps for any organizations: license could be outsourced. Close monitoring over their processes, would
however be required.
i. Constitution of an in-house core team of persons well versed with
internal procedures. 14. (Para 10.5.2.9) Registration of Births and Deaths

ii. Engaging external experts - if necessary. a. The emphasis under the Registration of Births and Deaths Act should
shift from compliance to prescribed procedures to achieving 100%
iii. Getting feedback from citizens. registration.
iv. Analyzing all processes from the point of necessity, simplicity, b. Registrars would need to adopt a more proactive approach, and it would be
rationality and citizen centricity. necessary to cast a duty upon them to register each case of birth and death
v. Redesigning processes and forms. within their jurisdiction irrespective of the fact whether a formal application
has been received by them. The Registration could be done based on
vi. Doing a pilot study and getting it evaluated. information from any source or even suo-motu by the Registrar.

vii. Once the pilot stabilizes, analyzing the changes required in the rules/ c. Sufficient number of public functionaries should be designated as Registrars
statutes. so that each one is assigned a manageable jurisdiction.

viii. Implementing the change. d. Each Registrar would need to be empowered under the law to seek and
obtain information from any person. For this purpose, the law should
ix. Creating an incentive mechanism for sustaining the change.

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 The Heart of Governance
7
SEVENTH REPORT
provide that the Registrar shall have the power to issue notice seeking
information from any person, regarding births and deaths and that person
shall be bound to provide such information.
SECOND ADMINISTRATIVE REFORMS COMMISSION
e. In order to make the process of imposition of fines quick and deterrent,
the powers to levy fines should be given to the District Registrar.

f. There should be no fees for delayed registration. It should be provided

that in case of delayed registration, a more elaborate enquiry would be
required. The onus for conducting the enquiry should be on the Competent
Authority.

15. (Para 10.5.3.7) Building Licenses and Completion Certificates

a. Simplified procedures for grant of building permits on the basis of self-

certification by owners / registered architects should be adopted by all
State Governments and local bodies.

b. The JNNURM guidelines should be amended to make adoption of such

procedures as a part of the mandatory reforms.

c. Similar simplification of procedures should be done in the issuance of

completion certificates by local bodies. In case of completed buildings, a CAPACITY BUILDING FOR
hundred per cent verification after the issue of completion certificates on
the basis of self-certification would be necessary within a specified period of
CONFLICT RESOLUTION
90 days. The Rules should provide heavy penalties, including demolition,
for violation of conditions as well as for negligence or collusion, if any, on
the part of the prescribed verifying authority.

d. The capacity building of the enforcement wings of the local bodies should FRICTION TO FUSION
also be done alongside these initiatives to ensure compliance with local
bye-laws. The help of local residents’ associations may be enlisted for this
purpose.

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FEBRUARY 2008
 Summary of Recondations

CONCLUSION accommodation and respect; to the give and take of democratic bargaining without
aggression, and to conflicts that are of ideas and thoughts rather than of sticks and
stones.
It has been said that peace is not the absence of conflict but the presence of creative
alternatives for responding to conflict – alternatives to passive or aggressive responses, The institutional mechanisms that can help bring this about are discussed in detail in this
alternatives to violence. Report. It is hoped that the shared vision of a peaceful and prosperous India can bring all
stakeholders together on this collective quest for resolving our differences peacefully as part
In this Report on Capacity Building for Conflict Management, the Administrative of our nation building process.
Reforms Commission (ARC) has tried to outline measures that can be taken to improve
the institutional capacity of the country to manage and resolve conflicts of all types. It is
well recognized today that the Indian Constitution provides ample scope to resolve conflicts
between different social groups, contains fissiparous tendencies across regions, and provides
hope to disadvantaged sections of our society, while remaining part of the diverse mosaic
that India represents.

During the course of our post Independence history, we have been faced with many types of
conflicts, some of which have been successfully resolved whereas some are still simmering.
A combination of political liberalism, strong governance structures and a resolute insistence
on adherence to our constitutional norms has enabled India to successfully rise above the
political tumult in our neighbourhood and protect our fledgling democracy to the point that
it has grown to become a mature and respected emerging power. Creating an institutional
context wherein conflict management is done in a democratic manner keeping the interests
of all sections of society in mind rather than resorting to short term fire fighting is the
focus of the Report.

The issue assumes paramount importance because increasingly in our country it has become
a disturbing truism that resorting to violent agitation is the preferred strategy for aggrieved
groups to articulate their grievances as compared to constitutional methods of democratic
agitation and dissent. The irony is that the father of the Indian Nation, Mahatma Gandhi,
was humanity’s torch bearer for non-violent and peaceful methods of agitations against
injustice. Satyagraha, civil disobedience, peaceful non-cooperation, there were all his
contributions to the arena of political mobilization of people for a cause.

India needs today to return to the paradigm of political agitations that remain peaceful,
to a political discourse that retains civility and humility , to a politics centred on mutual

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 Summary of Recondations

f. Formation of trained special task forces on the pattern of the Greyhounds

in Andhra Pradesh should be an important element of the strategy to build
capacity in the police machinery for tackling left extremism.

SUMMARY OF RECOMMENDATIONS g. Establishing and strengthening local level police stations, adequately staffed
by local recruits, in the extremist affected regions should be an important
component of the policing strategy for tackling left extremism.
h. For effective implementation of the Scheduled Tribes and other
1. (Para 3.8) Left Extremism
Traditional Forest Dwellers (Recognition of Rights) Act, 2006, multi-
a. A long-term (10-year) and short-term ( 5-year) Programme of Action based disciplinary Oversight Committees may be constituted to ensure that the
on the ‘14-Point Strategy’ announced in Parliament may be formulated implementation of this ameliorative legislation does not adversely affect
by the Union Government in consultation with the concerned State the local ecosystems.
Governments to identify State specific action to be taken to implement i. Special efforts are needed to monitor the implementation of constitutional
the ‘Strategy’. and statutory safeguards, development schemes and land reforms initiatives
for containing discontent among sections vulnerable to the propaganda of
b. While agreeing with the spirit of the ‘14-Point Strategy’, negotiations
violent left extremism.
with the extremist outfits should be an important mode of conflict
resolution. j. To facilitate locally relevant development adequate flexibility may be
provided to implementing agencies in the affected areas as regards centrally
c. There is a strong case for ‘back to the basics’ in the matter of administrative sponsored and other schemes, so as to enable them to introduce suitable
monitoring and supervision. The system of periodic official inspections changes based on local requirements.
and review of organisational performances needs to be revitalised. It must
be recognised that a major reason for such practices falling in disuse in k. Performance of the States in amending their Panchayati Raj Acts and other
‘disturbed areas’ is the apprehension of senior functionaries about their regulations to bring them in line with the provisions of the Panchayats
personal safety while on tour. It is advisable that the need to provide suitable (Extension to the Scheduled Areas) Act, 1996 (PESA) and in implementing
security to the senior administrative and technical officers while on tour, these provisions may be monitored and incentivised by the Union Ministry
is taken into account in working out requirements for security forces in of Panchayati Raj.
areas affected by serious violence.
l. The nexus between illegal mining/forest contractors and transporters
d. There is need to enhance the capacity of the security forces to act effectively and extremists which provides the financial support for the extremist
and firmly, but in conformity with constitutional bounds; it is necessary movement needs to be broken. To achieve this, special anti-extortion and
that standard operational procedures and protocols are laid down in specific anti-money laundering cell should be established by the State police/State
terms and detail. Government.
m. For implementing large infrastructure projects, particularly road networks,
e. Training and reorientation including sensitising the police and paramilitary
that are strongly opposed by the extremists or are used to extort funds
personnel to the root causes of the disturbances that they are seeking to
from local contractors, the use of specialised Government agencies like
curb, are necessary.
the Border Roads Organisation in place of contractors may be considered
as a temporary measure.

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2. (Para 4.9) Land Related Issues ii. The number of SEZs should be limited, with a larger minimum size
with locations preferably in backward areas so that they act as nuclei
a. The following steps may be taken to alleviate the distress in the agrarian
for economic growth.
sector:
iii. SEZs promoted by farmers themselves should be encouraged.
i. Provide renewed impetus to land reform measures like redistribution of
surplus land, vesting title in tenants and carrying forward consolidation iv. The livelihood of the displaced should be a major concern of the SEZ
of land holdings etc for maintaining and promoting the sustainability policy.
of agriculture.
v. The SEZ regulations should clearly allocate social responsibility
ii. In order to provide adequate and timely facilities to farmers, there of rehabilitation to entrepreneurs seeking to establish SEZs. This
is need to augment the banking system in the rural areas and make should include provision for water, sanitation, health facilities, and
them more responsive to the farmers’ needs. vocational training centres.
iii. Redesign poverty alleviation programmes to make them more relevant vi. The proportion of land that is permitted to be used by the promoters
to the needs of small and marginal farmers. of SEZs for non-processing activities should be kept to a minimum
and this should be ensured at the time of approval of their plans. The
iv. Step up public investment in order to expand non-farm and off existing ratio between processing and non-processing activities needs
farm activities to provide alternative livelihood opportunities for to be re-examined in order to maximize the proportion of land put
the poorer farmers within rural areas. to productive use. Also strict adherence to environmental regulations
v. Introduce measures to encourage formation of ‘Self Help Groups’ should be ensured.
(SHGs) to improve access to credit and marketing and empower the vii. Comprehensive land use plans should be prepared and finalised
disadvantaged. after wide public consultations. Industrial activities in SEZs should
be located only in areas earmarked for the purpose in the land use
vi. Diversify risk coverage measures such as weather insurance schemes
plans.
and price support mechanisms.
viii. The extremely liberal tax holidays provided both to export units and
b. A new legislation for land acquisition incorporating the principles laid
to developers require reconsideration.
down in the revised national rehabilitation policy needs to be enacted. The
recently announced national policy on rehabilitation of project affected 3. (Para 5.5) Water Related Issues
persons should be implemented forthwith for all ongoing projects as well
as those in the pipeline. a. The Union Government needs to be more proactive and decisive in cases
of inter-State river disputes and act with the promptness and sustained
c. There is need to amend the present approach to SEZs on the following attention that such disputes demand.
lines:
b. Since Article 262 of the Constitution provides that neither the Supreme
i. In establishing SEZs, use of prime agricultural land should be Court nor any other Court shall exercise jurisdiction in respect of inter-
avoided. State river disputes, it is necessary that the spirit behind this provision is
fully appreciated.

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c. River Basin Organisations (RBOs) should be set up for each inter-State awareness campaigns in areas where the awareness levels are low. The
river, as proposed by the Report of the National Commission for Integrated District Administration should organise independent surveys to identify
Water Resources Development, 1999 by enacting a legislation to replace ‘vulnerable areas’.
the River Boards Act, 1956.
f. The administration and the police should be sensitised towards the special
d. The Chairmen of all the River Basin Organisations, as and when formed, problems of the Scheduled Castes and Scheduled Tribes. They should also
should be made members of the National Water Resources Council. play a more pro-active role in detection and investigation of crimes against
the weaker sections. Appropriate training programmes would help in the
e. The National Water Resources Council and RBOs should play a more
sensitising process.
positive role. The Council and its secretariat should be more proactive,
suggest institutional and legislative reforms in detail, devise modalities g. Enforcement agencies should be instructed in unambiguous terms that
for resolving inter-State water conflicts, and advise on procedures, enforcement of the rights of the weaker sections should not be downplayed
administrative arrangements and regulation of use of resources by different for fear of further disturbances or retribution.
beneficiaries keeping in view their optimum development and ensuring
maximum benefits to the people. h. The Administration should focus on the rehabilitation of the victims and
provide all required support to them including counselling.
f. In order to develop, conserve, utilise and manage water on the basis of a
framework that incorporates long term perspectives, a national water law i. As far as possible the deployment of police personnel in police stations
should be enacted as suggested in para 5.4.3 above. with significant proportion of SCs and STs should be in proportion to the
population of such communities. The same principle should be followed in
4. (Para 6.11) Issues Related to Scheduled Castes cases of localities having substantial proportion of linguistic and religious
minorities.
a. Government should adopt a multi-pronged administrative strategy to
ensure that the Constitutional, legal and administrative provisions made j. A statutory duty may be cast on all public authorities to promote equality
to end discrimination against the Scheduled Castes are implemented in and actively check social discrimination.
letter and spirit.
k. It would be desirable to introduce a system of incentives wherein efforts
b. To ensure speedy disposal of discrimination cases pending in subordinate made by these officials in detecting and successfully prosecuting cases
courts, an internal mechanism may be set up under the control of the High of discrimination/atrocities against the Scheduled Castes are suitably
Court Administrative Judge to review such cases. acknowledged.

c. There is need to place a positive duty on public authorities for promotion l. There should be training programmes for the law enforcement agencies to
of social and communal harmony and prevention of discrimination against suitably sensitise them to the problems of the Scheduled Castes and the
the Scheduled Castes and Scheduled Tribes. need for strict enforcement of laws.

d. There is need for engaging independent agencies to carry out field surveys m. The local governments – municipalities and panchayats – should be actively
to identify cases of social discrimination. involved in various programmes concerned with effective enforcement of
various social legislations.
e. There is need to spread awareness about the laws and the measures to
punish discrimination and atrocities. It is necessary to launch well-targeted

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n. The corporate sector and NGOs need to be involved in complementing f. Government should select such police, revenue and forest officials who
the efforts of government for the development of the Scheduled Castes. have the training and zeal to work in tribal areas and understand as well
Such voluntary action should not only be directed towards economic and as empathise with the population they serve.
social empowerment of the SCs, but also towards enabling them to raise
their voice against atrocities, discrimination and exploitation. g. A national plan of action for comprehensive development which would
serve as a road map for the welfare of the tribals should be prepared and
5. (Para 7.10) Issues Related to Scheduled Tribes implemented.
a. While all States in the Fifth Schedule Area have enacted compliance h. There should be convergence of regulatory and development programmes
legislations vis-à-vis PESA, their provisions have been diluted by giving in the tribal areas. For the purpose, a decadal development plan should be
the power of the Gram Sabha to other bodies. Subject matter laws and prepared and implemented in a mission mode with appropriate mechanism
rules in respect of money lending, forest, mining and excise have not also for resolution of conflicts and adjustments.
been amended. This needs to be done. In case of default, Government of
India would need to issue specific directions under Proviso 3 of Part A i. The authorities involved in determining the inclusion and exclusion of tribes
of the Fifth Schedule, to establish a forum at the central level to look at in the list of Scheduled Tribes should adopt a mechanism of consultation
violations and apply correctives. The Commission would like to re-iterate with the major States and those with tribal populations, on the basis of
the importance of the Annual Reports of the Governors under the Fifth which a comprehensive methodology with clearly defined parameters is
Schedule of the Constitution. arrived at.

b. Awareness campaigns should be organised in order to make the tribal 6. (Para 8.6) Issues Related to Other Backward Classes
population aware of the provisions of PESA and the 73rd amendment to
the Constitution so as to demand accountability in cases in which the final a. Government may work out the modalities of a survey and take up a state-
decisions are contrary to the decisions of the Gram Sabha or Panchayat. wise socio-economic survey of the “Other Backward Classes”, which could
form the basis of policies and programmes to improve their status.
c. There should be a complete overhaul and systematic re-organisation
of existing land records with free access to information about land b. Government needs to formulate and implement a comprehensive scheme
for capacity building of OBCs that would bring them at par with the rest
holdings.
of society.
d. There is need to harmonise the various legislations and government policies
7. (Para 9.6) Religious Conflicts
being implemented in tribal areas with the provisions of PESA. The laws
that require harmonisation are the Land Acquisition Act, 1894, Mines a. Community policing should be encouraged. The principles laid down by
and Minerals (Development and Regulation) Act, 1957, the Indian Forest the Commission in paragraph 5.15.5 of its Report on ‘Public Order’ should
Act, 1927, the Forest Conservation Act, 1980, and the Indian Registration be followed.
Act. National policies such as the National Water Policy, 2002, National
Minerals Policy, 2003, National Forest Policy, 1988, Wildlife Conservation b. District Peace Committees/Integration Councils should be made effective
Strategy, 2002 and National Draft Environment Policy, 2004 would also instruments of addressing issues likely to cause communal disharmony.
require harmonisation with PESA. The District Magistrate in consultation with the Superintendent of
Police should constitute these committees. In Police Commissionerates,
e. Mining laws applicable to Scheduled Tribal Areas should be in conformity these committees should be constituted by the Police Commissioner in
with the principles of the Fifth and Sixth Schedules of the Constitution.
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consultation with the Municipal Commissioner. The committees should Enforcement of the law could be entrusted to the Election Commission.
be of permanent nature. These committees should identify local problems The law should also stipulate punitive action against political parties and
with a potential to degenerate into communal conflicts and suggest means their functionaries violating the prescribed forms of democratic dissent,
to deal with them at the earliest. Further, Mohalla Committees should also by providing for criminal cases to be filed against them and imposing fines
be organised on the same lines. as deterrent.
c. In conflict prone areas, the police should formulate programmes in which b. There should be consensus that identity politics would be played within the
the members of the target population get an opportunity of interacting space provided by democracy and not allowed to develop into intractable
with the police as a confidence building mechanism. conflicts leading to violence. Political parties need to build capacity to
arrive at such a consensus.
d. A separate law to deal with communal violence is not required. The
existing provisions of the Indian Penal Code and the Criminal Procedure 9. (Para 11.6) Regional Disparities
Code need to be strengthened. This may be achieved by incorporating
provisions for: a. A composite criteria for identifying backward areas (with the Block as a
unit) based on indicators of human development including poverty, literacy
i. Enhanced punishments for communal offences. and infant mortality rates, along with indices of social and economic
infrastructure, should be developed by the Planning Commission for the
ii. Setting up of special courts for expeditious trial of cases related to 12th Five Year Plan.
communal violence.
b. Union and State Governments should adopt a formula for Block-wise
iii. Giving powers of remand to Executive Magistrates in cases of communal devolution of funds targeted at more backward areas.
offences.
c. Governance needs to be particularly strengthened in more backward areas
iv. Prescription of norms of relief and rehabilitation. within a State. The role of ‘special purpose vehicles’ such as backward area
development boards and authorities in reducing intra-State disparities
Further, as recommended in para 6.1.7.9 of the Commission’s Report on
needs to be reviewed. It is advisable to strengthen local governments and
‘Public Order’, this should be accompanied by the deletion of the provisions
make them responsible and accountable.
contained in Section 196 of CrPC requiring prior sanction of the Union
or State Government or the District Magistrate for initiating prosecution d. A system of rewarding States (including developed States) achieving
for offences under Sections 153A, 153B, 295A and sub-sections (1)(c), (2) significant reduction in intra-State disparities should be introduced.
and (3) of Section 505 of IPC.
e. Additional funds need to be provided to build core infrastructure at the
e. For providing relief and rehabilitation to victims of communal violence, inter-district level in less developed States and backward regions in such
the framework provided under the Disaster Management Act, 2005 could States. The quantum of assistance should be made proportionate to the
be effectively used. number of people living in such areas.
8. (Para 10.3) Politics and Conflicts f. The approach to all such funding should be outcome driven. The strategy
should be to define acceptable minimum norms of human and infrastructure
a. Political parties should evolve a code of conduct on the forms of dissent
development that every block in the country should attain and funding
permissible in our democratic set up. This could be incorporated in a
should be driven by the consideration to achieve the norms so defined.
law, which would apply to all political parties and their functionaries.
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10. (Para 12.6.1.4) Capacity Building in Administration in the North East 12. (Para 12.6.3.1.7) Capacity Building in Local Governance Institutions in the North
East – Sixth Schedule Councils
a. Greater opportunities may be provided to officers serving in the region
to serve outside the North East to gain greater exposure to diverse work a. To avoid complaints of less favourable treatment to ‘Scheduled Areas’ in
situations. Local and technical officers from the State should also be given certain respects, suitable amendment may be made in the Sixth Schedule
opportunities to serve in larger States and to improve their professional of the Constitution to enable the Autonomous Councils to benefit from
qualifications through training in the country and abroad. the recommendations of State Finance Commissions and the State Election
Commissions provided respectively under Articles 243I and 243K of the
b. Incentives available for officers working in the North East should be
Constitution of India.
increased.
b. The Union Government, Government of Meghalaya and the Autonomous
c. Regional training institutions for various branches of administration,
Councils in that State may review the existing pattern of relationship
including the technical services may be operated by the North Eastern
between the Councils and the State Government to evolve a satisfactory
Council.
mechanism to resolve conflicts between the Councils and the State
d. NEC may initiate discussions with the States to examine the legal Government.
implications and feasibility of regional cadres for senior positions in c. Ministry of Home Affairs may, in consultation with the concerned State
technical and specialised departments under the States. Governments and the Autonomous Councils, identify powers under the
e. NEC and the Ministry of Home Affairs may, in collaboration with the Sixth Schedule that Governors may exercise at their discretion without
States, draw up an agenda for administrative reforms for the region with its having to act on the ‘aid and advice’ of the Council of Ministers as envisaged
implementation being monitored systematically. Satisfactory performance in Article 163 (1) of the Constitution.
in implementation of this charter may qualify the States to additional d. Paragraph 14 of the Sixth Schedule may be suitably amended to enable the
funding including special economic packages. Union Government to appoint a common Commission for all autonomous
districts for assessing their state of administration and making other
11. (Para 12.6.2.4) Capacity Building in Police in the North East
recommendations envisaged in that paragraph. A periodicity may also be
a. The North Eastern Police Academy (NEPA) needs major upgradation provided for the Commission.
of infrastructure and staff to cater to a larger number of officers at the
e. Government of Assam should review the existing arrangements of
induction level. NEPA may also be developed for imparting training to civil
determining budgetary allocations and release of funds to the ‘original’
police officers from other regions in dealing with insurgency. Financial and
Autonomous Councils with a view, as far as practicable, to bringing them
other incentives are necessary for attracting and retaining instructors in the
at par with the arrangements for the Bodoland Territorial Council.
Academy from the Central Police organisations and civil police particularly
those with proven track record in counter-insurgency operations. 13. (Para 12.6.3.2.4) Capacity Building in Local Governance Institutions – Village
Level Self-governance in the Tribal North East
b. Concrete steps are needed to introduce a scheme of deploying police
personnel from the region to Central Police Organisations and to encourage a. Measures should be taken to ensure that all the Autonomous Councils pass
deputation of police officers from outside the region to the North Eastern suitable legislation for establishing of village level bodies with well defined
States. powers and a transparent system of allocation of resources.

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b. Stipulation may be made in the rules relating to release of grants to the c. State Governments may take steps to identify innovative initiatives which
Autonomous Councils to the effect that passage of appropriate legislation could be entrusted to the Tribe Specific Councils without affecting area
for elected village level bodies and its implementation, will entitle the development concerns.
Councils to additional funding.
d. Suitable guidelines may be prepared for preparation of District and sub-
c. To enable the Autonomous Councils to discharge their responsibilities District plans in the relevant areas through joint efforts of the Tribe Specific
satisfactorily, it is imperative that the requirement of funds by these bodies Councils and the Panchayati Raj Institutions.
is worked out normatively with reference to the minimum standards of
service to be provided and capacity to raise local resources. Such exercise e. While continuous and vigorous measures are needed to bring about a
could be undertaken by the State Finance Commission. consensus between various sections of society in Manipur about revival
of the Hill Districts Councils, steps may be urgently taken to bring in
d. Nagaland has made commendable efforts to usher in a paradigm of suitable legislation to introduce elected village level bodies in the hill areas
decentralised village self-governance which combines the elective element of that State.
with traditional power centers. The Ministry of Rural Development
should formally recognise this arrangement for implementation of various 15. (Para 12.6.4.3) Capacity Building in Regional Institutions in the North East – NEC
development and poverty alleviation initiatives. and DONER

e. Government of Meghalaya may take steps for extension of the experiment a. The NEC Act, 1971 may be suitably amended to restore the original
of elected village committees in the Garo Hills for implementation ‘conflict resolution provision’ requiring the Council to ‘discuss issues of
of the National Employment Guarantee Act throughout the State for mutual interest to two or more states in the region and to advise the Central
implementation of all rural development programmes. Government thereon’.

f. It is imperative that in all States where village bodies administer justice c. To enable the Council to assist effectively in the discharge of its
under customary laws by virtue of the Sixth Schedule or other laws, such responsibilities for reviewing the measures taken by the member-States for
laws are duly codified. maintenance of security in the region, Ministry of Home Affairs should
keep the Council Secretariat regularly within its ‘security coordination
14. (Para 12.6.3.4.3) Capacity Building in Local Governance Institutions in the North loop’. The Council Secretariat would also need to be suitably strengthened
East – Tribe Specific Councils in Assam and other Issues to effectively assist in security coordination.

a. Government of Assam may apportion functions between the tribe specific d. The Planning Commission needs to lay down a framework for preparation
Councils/village Councils and the Panchayati Raj Institutions in a manner of integrated regional plans, with priorities and not as an assortment of
that schemes involving individual tribal beneficiaries may be assigned to schemes by the NEC. The regional plan should focus on areas with a bearing
the ‘Tribe Specific Councils’ while area development schemes are left to on intra-regional, inter-State priorities which have the potential of avoiding
the latter. conflicts and promoting regional integration.

b. State Governments may initiate a system of meeting at least the establishment e. Planning Commission should ensure the association of the NEC in the
costs of the Councils from sources outside the tribal sub plan and build in State plan formulation exercise by suitably amending their guidelines.
these requirements in their projections to the next Finance Commission.

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f. The responsibility of sanctioning funds from the ‘Non Lapsable Central 18. (Para 12.6.7.2) Capacity Building in the North East – Miscellaneous Issues
Pool of Resources’ (NLCPR) should be entrusted to the North Eastern
Council (NEC). NEC should work out mechanisms for scrutinising a. The recommendations of the High Level Commission contained in its
proposals for funding from the ‘pool’ and their funding in coordination Report – ‘Transforming the North East’ - and the report of the Task Force
with the Ministries concerned. on Development Initiatives prepared by the North Eastern Council should
be implemented to fill the gaps in infrastructure in the region.
g. It is desirable that a 10-year perspective plan is prepared for the entire
region encompassing areas like development of human resources and b. A comprehensive framework needs to be evolved and put in place to promote
infrastructure. A governance reform agenda should also form part of this the region as a preferred investment destination.
plan. This comprehensive plan needs to be reviewed by the Prime Minister
regularly with the Chief Ministers for speedy follow-up. c. A Transport Development Fund to finance construction of important road
corridors should be set up.
h. The Ministry for Development of North Eastern Region (DONER) may
be abolished and the responsibility for the development of the region, d. Comprehensive implementation of a ‘look east’ policy though relevant for
including the infrastructure sectors, and utilisation of the non-lapsable the country as a whole, is especially important for the long term growth
fund should be restored to the subject matter Ministries, with the MHA of the North East. The agenda for its implementation must be prepared
acting as the nodal Ministry. in active association with the State Governments. Clear apportionment
of responsibility for planning and implementation of the policy between
16. (Para 12.6.5.2) Capacity Building in Other Regional Institutions in the North various Ministries of the Union Government for its implementation should
East be expeditiously undertaken.

a. NEC may prepare a comprehensive scheme for making NEHU a centre e. Rail connectivity should be improved in the region on a priority basis.
for advanced study in Sciences, Social Sciences and Humanities to
address diverse issues common to the region as a whole. NEC may also f. Much greater efforts are needed to establish bank branches and other credit
actively coordinate arrangements with the State Governments to make disbursement outlets through further relaxation and incentivisation in the
NEIGRIHMS a centre for tertiary health care particularly for the low policies of the Reserve Bank and other financial institutions.
income groups in the region. g. There is need for setting up of centres of excellence for professional and
higher education in the North East. In addition, a large scale expansion
17. (Para 12.6.6.3) National Register of Indian Citizens
of facilities for technical education, such as ITIs, should be carried out to
a. The MNIC project needs to be taken up on a priority basis. Since there create a pool of skilled work force and generate entrepreneurial capacity
are several Union Government and State Government agencies which as well as employment.
issue similar identity cards, it would be necessary to achieve convergence
h. There is a need to make an in-depth study of the customary judicial system
amongst all such systems so that the MNIC becomes the basic document
in order to achieve better understanding and dissemination of the prevailing
for identification of a person and lends itself to be used as a multi-purpose
norms and practices.
individual card. Priority should be given to areas having international
borders, for implementation of this Project. i. It is necessary to evolve a credible system of maintenance of land records
for the North East.

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19. (Para 13.2.5) Executive and Conflict Management – Police and Executive initiatives also attempt to involve communities in ‘in-house’ conflict
Magistracy resolution.
a. Police Reforms recommended by the Commission in its Fifth Report, “Public b. General policy guidelines need to be formulated by the State Governments
Order” (Chapters 5 and 6) are likely to augment the institutional capacity of for involving both the Panchayats and urban local bodies along with ‘non-
the Police to play a more proactive and effective role in conflict resolution. police’ instrumentalities of the State, in conflict resolution.
The Commission, therefore, reiterates these recommendations.
c. Guidelines of Centrally sponsored and Central Sector Schemes may be
b. Police Manuals must be updated to contain suitable provisions extending suitably modified to require that beneficiary capacity building may also
the scope of responsibilities of Police officials to include conflict resolution emphasise developing self-reliance in local conflict management.
in their charter of duties. Suitable amendments in training formats may
also be carried out to provide relevant inputs on the subject. Achievements 22. (Para 14.3.1.1.10) Institutional Arrangements for Conflict Management – The
under this ‘head’ needs to be taken into account while evaluating overall Inter-State Council
performance.
a. The conflict resolution role envisaged for the Inter-State Council under
c. Executive Magistrates in their capacity as Revenue and other field level Article 263 (a) of the Constitution should be effectively utilised to find
officials have extensive public inter-face and enjoy considerable goodwill solutions to disputes among States or between all or some of the States
particularly in rural areas. Their familiarity with the field situation and and the Union.
general acceptability makes them eminently suitable to be involved as
interlocutors in mediating in local conflicts. State Governments need to b. The Inter-State Council may not, however, exist as a permanent body.
build on the modalities and the institutional framework in this regard. As and when a specific need arises, a suitable Presidential order may be
issued constituting and convening the Council to consider a dispute or
20. (Para 13.3.4) Judicial Delays and Alternative Dispute Redressal coordination of policy or action on matters of interest to the Union and
concerned States. This body may cease to function once the purpose for
a. Allocation of resources for upgradation of infrastructure and personnel of which it was constituted is completed.
the subordinate judiciary needs to receive higher priority in federal fiscal
transfers. c. The composition of an Inter-State Council may be flexible to suit the
exigencies of the matter referred to it under Article 263.
b. Much greater attention needs to be paid to make the institution of
Lok Adalats serve their intended objective, and in particular to enlist d. If necessary, more than one Inter-State Council could be in existence at the
active cooperation of the members of the Bar to give this approach a chance same time with different terms of reference and composition as warranted
of success. for each Council.

c. Ministry of Law may initiate a dialogue with the Bench and the Bar of the 23. (Para 14.3.1.2.5) Institutional Arrangements for Conflict Management – The
higher judiciary to explore ways and means of bringing ‘greater finality’ National Commission for Scheduled Castes and The National Commission for
to the decisions of quasi-judicial authorities and bodies. Scheduled Tribes

21. (Para 13.4.5) Civil Society and Conflict Resolution a. The National Commissions for Scheduled Castes and Scheduled Tribes have
an important mandate to guide review and monitor the implementation
a. While social capital formation needs encouragement to improve delivery of safeguards provided for SC/STs in various fields, including in the
of services and build community self reliance, it is imperative that such
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 Capacity Building for Conflict Resolution Summary of Recondations

matter of their service conditions. It is imperative that the focus of the (e) Summary proceedings of the NIC may be laid before both Houses of
two Commissions remains on policy and larger issues of implementation Parliament.
rather than on cases of an individual nature which can be looked into by
the administrative Ministries/appropriate forum with the Commissions (f ) The Indian Council of Social Science Research (ICSSR) and the Planning
playing a critical oversight role. Commission may take a lead in the matter of establishing a multi-
disciplinary research and policy analysis platform to discuss issues
b. The administrative Ministries connected with the two Commissions may concerning national integration either in an existing institution or by
undertake an exercise, and in consultation with these bodies, work out promoting a new institution or as a network.
the details of how these bodies could be better enabled to discharge their
constitutional mandate. 26. (Para 14.3.3.3.2) Institutional Arrangements for Conflict Management – National
Development Council and Other Apex Level Bodies
24. (Para 14.3.2.1.4) Institutional Arrangements for Conflict Management – The
Zonal Councils a. Specific rules of procedure for the National Development Council and other
apex level bodies may be drawn up to ensure focussed deliberations.
a. The system of Zonal Councils may be dispensed with. Important issues of
Inter-State coordination or disputes between States in the same region may, 27. (Para 14.4.2) Institutional Arrangements for Conflict Management – Other
wherever necessary, be entrusted to an Inter-State Council with appropriate Institutional Innovations
composition and terms of reference so that any given issue is considered
in depth. a. State Integration Councils may be constituted to take stock of State level
conflict situations having suitable linkages with the NIC. In important
25. (Para 14.3.3.1.8) Institutional Arrangements for Conflict Management – The matters, the report of State level bodies may also be brought for
National Integration Council consideration, advice and recommendations of the NIC. Guidelines for
deciding the membership to the National Integration Council may also
(a) The mandate of the National Integration Council (NIC) requires give suitable weightage to adequately representing the State Integration
consideration of all factors impinging on national cohesion, and not only Councils in the national body.
communalism or communal violence. The agenda of the NIC needs to be
diversified. b. District level integration Councils (District Peace Committees) having
suitable linkages with the State Councils may also be considered particularly
(b) Substantive issues before the Council may be considered in detail in smaller, for Districts with a history of violent, divisive conflicts. These should
subject-matter specific committees. comprise eminent individuals enjoying confidence of all sections of
society. These bodies may play mediatory and advisory roles in conflict
(c) The composition of the NIC may be rationalised to facilitate consideration situations.
of a wider variety of issues. Broad guidelines may be framed by the Ministry
of Home Affairs for identifying interest groups and specialty streams that
need to be represented on the NIC.

(d) The Council may meet at least once a year, while the sub-committees could
meet as often as required to complete the assigned task in a time-bound
manner.

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 EIGHTH REPORT

SECOND ADMINISTRATIVE REFORMS COMMISSION CONCLUSION

Development, stability, good governance and the rule of law are inextricably linked and any
threat to peace poses an obstacle to the objective of sustainable development of the country.
Terrorism not only subverts the political and social climate but also threatens the economic
stability of the country, undermines democracy and even deprives ordinary citizens of their
fundamental rights, including their right to life.

Terrorists do not belong to any religion or faith or community. Terrorism is an attack on

democracy and the civilized society by a violent few who resort to targeted killing of innocent
citizens in pursuit of their evil designs. In some respects, terrorism is more damaging than an
act of war against the nation because terror acts often target innocent civilians – apart from
the symbols of the State – terrorists have targetted women and children in public parks,
commuters during rush hours on suburban trains, shoppers in a crowded market, community
gatherings on religious occasions. Furthermore, terrorism today has acquired newer and more
COMBATTING TERRORISM dangerous dimensions threatening international peace and stability worldwide with the use
by terrorist groups of modern communication systems, and state-of-the-art technology
PROTECTING BY RIGHTEOUSNESS combined with global linkages with organized crime, drug trafficking, counterfeit currency
and money laundering. That is why international cooperation is essential in the fight against
terror. India has been one of the worst victims of terrorism but our society has shown tremendous
spirit and resilience in the wake of repeated and wanton terrorist attacks by maintaining
communal harmony and social amity. It is time however for the nation to gear itself to
counter terror in a more coherent and proactive manner and not rely on the patience of its
citizens to outlast and defeat terrorists and their supporters.

The anti-terrorism strategy must recognise that terrorist acts not only ruin innocent lives, but
also divide our society, create discord among people and cause lasting damage to the fabric of
the society. Unlike ‘chemotherapy’ in cancer treatment which destroys both good and bad
cells, a strong anti-terrorism response has to be focussed and well directed against the anti-
national elements. In this Report on Terrorism, the Commission has made wide-ranging
recommendations for improving the capabilities of our intelligence and security agencies,
enhancing coordination among the various security agencies, and creating a new legal
framework for the prosecution of terrorist acts as well as to cut off the flow of funds to terrorist
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JUNE 2008
 Combatting Terrorism

groups. The Report also points out that in addition to sustained and stringent action by the
security agencies against terrorists and anti-national activities, civil society can also play a
major role both in preventing terrorist activities and in countering the ideology of terrorism.
Cooperation by the citizens and by the media is equally vital in the fight against terrorism.
The thrust of the Report is that a multi-pronged approach encompassing legal and SUMMARY OF RECOMMENDATIONS
administrative measures combined with good governance, inclusive development, a vigilant
media and an alert citizenry can defeat terrorism in any form.
1. (Para 4.1.6.9) Need for a Comprehensive Anti Terrorist Legislation
a. A comprehensive and effective legal framework to deal with all aspects of
terrorism needs to be enacted. The law should have adequate safeguards
to prevent its misuse. The legal provisions to deal with terrorism could be
incorporated in a separate chapter in the National Security Act, 1980.
2. (Para 4.2.9) Definition of Terrorism
a. There is need to define more clearly those criminal acts which can be
construed as being terrorist in nature. The salient features of this definition
should inter alia include the following:
i. use of firearms, explosives or any other lethal substance to cause or
likely to cause damage to life and property and essential
infrastructure including installations/establishments having military
significance.
ii. assassination of (including attempt thereof) public functionaries.
The intent should be to threaten the integrity, security and
sovereignty of India or overawe public functionaries or to terrorise
people or sections of people.
iii. Detention of any person or threat to kill or injure any person to
force the government to act or abstain from acting in a particular
manner.
iv. Providing/facilitating material support, including finances, for the
aforesaid activities.
v. Commission of certain acts or possession of certain arms etc. by
members or supporters of terrorist organizations which cause or
are likely to cause loss of life, injury to a person or damage to any
property.
3. (Para 4.3.8) Bail Provisions
a. Regarding grant of bail, the law should provide that:
i. Notwithstanding anything contained in the Code, no person
accused of an offence punishable under this Act shall, if in custody,
be released on bail or on his own bond unless the Court gives the
Public Prosecutor an opportunity of being heard;
ii. Where the Public Prosecutor opposes the bail application of accused
to release on bail, no person accused of an offence punishable under
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 Combatting Terrorism Summary of Recommendations

this Act or any rule made thereunder shall be released on bail until trial of terrorism related cases may be incorporated in the law on terrorism.
the Court is satisfied that there are grounds for believing that the Other specific provisions related to such Special Courts may also be
accused is not guilty of committing such offence. incorporated. Such Courts may be set up as and when required.
Provided that after the expiry of a period of one year from the date 9. (Para 4.10.3) Possession of Arms etc.
of detention of the accused for an offence under this Act, the
provisions of sub-section (i) of this section shall apply. a. Provision for penalizing unauthorized possession of certain specified arms
and ammunition in notified areas and unauthorized explosive substances,
iii. A Review Committee should review the case of all detenus periodically weapons of mass destruction and biological or chemical substances of
and advise the prosecution about the release of the accused on bail warfare in notified as well as non-notified areas, may be incorporated in
and the prosecution shall be bound by such advice. the law on terrorism.
4. (Para 4.4.5) Period of Detention (Remand) during Investigation 10. (Para 4.11.4) A Federal Agency to Investigate Terrorist Offences
a. For terrorist and other related offences, it should be provided that Section a. The Commission would like to reiterate the recommendations made in
167 of the CrPC shall apply subject to the modification that in sub-section its Report on ‘Public Order’ (paragraph 8.3.14) on the creation of a
(2), the references to “fifteen days”, “ninety days” and “sixty days”, specialized Division in the CBI to investigate terror offences.
wherever they occur, shall be construed as references to “thirty days”,
“ninety days” and “ninety days” respectively. b. It should be ensured that this Division of the CBI is staffed by personnel
of proven integrity and who are professionally competent and have
5. (Para 4.5.10) Confession before a Police Officer developed the required expertise in investigation of terrorism related
a. Confession before the police should be made admissible as recommended offences. The autonomy and independence of this agency may be ensured
in the Report on Public Order. But this should be done only if through a laid down procedure of appointment and assured fixed tenure
comprehensive police reforms as suggested by the Commission are carried for its personnel.
out. Till such time, confessions should continue to be made before judicial 11. (Para 5.2.4) Measures against Financing of Terrorism – Anti-money Laundering
magistrates under Section 164 CrPC. Measures
6. (Para 4.6.5) Presumptions under the Law a. The Prevention of Money-laundering Act (PMLA) may be suitably
a. The following legal provisions should be included regarding presumptions: amended at an early date to expand the list of predicate offences to widen
its scope and outreach.
If it is proved –
b. The stage at which search and seizure action may be taken under the
i. that the arms or explosives or any other dangerous substance were PMLA may be advanced in cases involving wider ramifications. Adequate
recovered from the possession of the accused and there is reason to believe safeguards may also be put in place in such cases.
that such arms or explosives or other substances of similar nature, were
used in the commission of such offence; or that by the evidence of an c. It may be examined whether institutional coordination mechanisms
expert the fingerprints of the accused, or any other definitive evidence between the Directorate of Enforcement and other intelligence collecting
were found at the site of the offence or on anything including arms and and investigating agencies, could be strengthened and some provisions
vehicles used in connection with the commission of such offence the of the PMLA delegated to them by the Enforcement Directorate.
Court shall draw adverse inference against the accused. d. The financial transaction reporting regime under the Financial Intelligence
ii. If it is proved that the accused rendered any financial assistance to a Unit (FIU-IND) may be extended to cover high risk sectors such as real-
person accused of, or reasonably suspected of, an offence of terrorism, estate. There is also need to strengthen the capacity of FIU-IND to enable
the Court shall draw adverse inference against the accused. it to meet future challenges.
7. (Para 4.7.10) Review Committee e. It would be useful to utilize the platform provided by the Regional
Economic Intelligence Councils (REICs) for increased coordination among
a. A statutory Review Committee should be constituted to examine each case various investigation agencies in cases which are suspected to be linked
registered, within 30 days of its registration. The Review Committee should with money laundering. Further, owing to the complexity of cases involved,
satisfy itself that a prima facie case has been made out by the investigation the FIU-IND, apart from disseminating agency specific information, should
agency. This Committee should review each case every quarter. furnish overall region-centric information to the Central Economic
8. (Para 4.9.5) Special Courts Intelligence Bureau (CEIB) for disseminating it to the respective REICs
with a view to expanding the information regime.
a. Provisions for constitution of Special Fast Track Courts exclusively for
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 Combatting Terrorism

12. (Para 5.3.4) Measures against Financing of Terrorism – Measures to Block the
flow of Funds for Financing Terrorist Activities
a. The new legal framework on terrorism may incorporate provisions
regarding freezing of assets, funds, bank accounts, deposits, cash etc.
when there is reasonable suspicion of their intended use in terrorist
activities. Such actions may be undertaken by the investigating officer
with the prior approval of a designated authority, subject to adequate
safeguards. These provisions may be incorporated in a separate chapter
in the National Security Act, 1980 as recommended in paragraph 4.1.6.9.
b. A specialized cell may be created in the proposed National Counter-
terrorism Centre drawing upon expertise from the Union Ministries of
Finance and Home Affairs and the Cabinet Secretariat for taking concerted
action on the financial leads provided from information gathered by various
sources. Further, different investigation agencies dealing with financial
transactions may setup anti-terrorist finance cells within their organizations
to augment the efforts of intelligence agencies involved in counter-
terrorism activities.
c. For speedy investigation into the financial aspects of specific cases/group
of cases related to terrorist activities, dedicated teams may be formed within
the agencies charged with the responsibility of investigating into offences
related to terrorism. This may be accomplished by inducting officers having
specialization in different aspects of financial investigation for short
periods, say three to six months. A protocol for achieving this may be
arrived at between the concerned Union and State Ministries/Departments
to facilitate such capacity building and strengthening the effectiveness of
the counter-terrorist measures.
13. (Para 7.2.6) Role of Citizens, Civil Society and Media in Combatting Terrorism
– Education
a. NCERT has proposed a scheme to encourage and support institutions,
voluntary agencies and NGOs etc. engaged with school education for
promotion of Education for Peace within the country. These initiatives
need to be encouraged with necessary funds and other material support.
b. The feasibility of extending the scheme to religious schools also needs to
be examined.
18. (Para 7.4.7) Role of Citizens, Civil Society and Media in Combatting Terrorism
– Media
a. The potential of media in spreading education and awareness needs to be
tapped to build the capacity of citizens in dealing with any public disorder,
particularly terrorist violence.
b. Media should be encouraged to evolve a self regulating code of conduct
to ensure that publicity arising out of terrorist attacks does not help the
terrorist in their anti-national designs.

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 14

FOURTEENTH REPORT

SECOND ADMINISTRATIVE REFORMS COMMISSION

STRENGTHENING FINANCIAL MANAGEMENT SYSTEMS

STRENGTHENING
FINANCIAL MANAGEMENT SYSTEMS

Second Administrative Reforms Commission

Government of India

2nd Floor, Vigyan Bhawan Annexe, Maulana Azad Road, New Delhi 110 011
e-mail : arcommission@nic.in website : http://arc.gov.in
APRIL 2009
 CONCLUSION SUMMARY OF RECOMMENDATIONS

In this Report on Financial Management, the Commission has examined the issue of reforms 1. (Para 4.5.8) Unrealistic Budget Estimates
in the public financial management system as a part of the overall governance reform.
Efforts aimed at improving the efficiency, responsiveness and accountability of Government
a. The assumptions made while formulating estimates must be realistic. At the
organizations have to be complemented by reforms in financial management system in order
end of each year the reasons for the gap between the ‘estimates’ and ‘actuals’
to deliver the desired outcome. In accordance with its terms of reference, the Commission has
largely emphasized the expenditure size of public finance in India with particular attention must be ascertained and efforts made to minimize them. These assumptions
to proper maintenance of accounts, smooth flow of funds and strengthening of internal and should also be subject to audit.
external audit mechanisms.
b. The method of formulation of the annual budget by getting details from
Maintaining financial discipline and prudence while simultaneously ensuring prompt and
different organizations/units/agencies and fitting them into a pre-determined
efficient utilization of resources to achieve the goals of different government agencies has to
aggregate amount leads to unrealistic budget estimates. This method should
be the underlying theme for all government agencies. Towards this end, accountability needs
be given up along with the method of budgeting on the basis of ‘analysis of
to shift from compliance with procedures to a much greater focus on results and outcomes.
Tools of modern of financial management like information technology and financial trends’. This should be replaced by a ‘top-down’ method by indicating aggregate
information system need to be used to improve accountability combined with accurate limits to expenditure to each organization/agency.
budgeting and realistic economic assumptions.
c. Internal capacity for making realistic estimates needs to be developed.
In order to reform the financial management system in India, the Commission has suggested
adoption of medium term plan/budget framework and alignment of plan, budget and
accounts, in order to bring greater synergies between the annual budgets and the five year 2. (Para 4.6.5) Delay in Implementation of Projects
development plan. A paradigm shift from the traditional bottom up approach to budgeting
to a top down technique focusing on broader resource allocations as well as on outcomes a. Projects and schemes should be included in the budget only after detailed
rather than processes has also been recommended. This has to be combined with greater consideration. The norms for formulating the budget should be strictly adhered
operational autonomy to government agencies and decentralization of administrative and to in order to avoid making token provisions and spreading resources thinly
financial powers to them in order to improve their efficiency. over a large number of projects/schemes.
Any financial management system, howsoever sound, will not be able to deliver the
desired outcomes unless there are strong internal and external oversight mechanisms. The
Commission has therefore recommended measures for strengthening of both internal and
external audit mechanisms.

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 Strengthening Financial Management Systems Summary of Recommendations

3. (Para 4.7.8) Skewed Expenditure Pattern – Rush of Expenditure towards the end of the a. The Plan versus non-Plan distinction needs to be done away with.
Financial Year
8. (Para 5.2.12) Flow of Funds relating to Centrally Sponsored Schemes
a. The Modified Cash Management System should be strictly adhered. This
System should be extended to all Demands for Grants as soon as possible.
a. The Controller General of Accounts, in consultation with the C&AG, should
4. (Para 4.8.26) Inadequate Adherance to the Multi-year Perspective and Missing Line of lay down the principles for implementing the system of flow of sanctions/
Sight between Plan and Budget approvals from the Union Ministries/Departments to implementing agencies
in the States to facilitate release of fund at the time of payment. After taking
a. A High Powered Committee may be constituted to examine and recommend on into account the available technology and infrastructure for electronic flow
the need and ways for having medium-term expenditure limits for Ministries/ of information and funds, especially under the NeGP, and putting in place a
Departments through the Five Year Plans and linking them to annual budgets new Chart of Accounts, the scheme should be implemented in a time bound
with carry forward facility. manner.

b. In order to bring about clarity, transparency and consolidation, the ways and 9. (Para 5.3.6) Development of Financial Information System,
means for implementing an ‘alignment’ project, similar to that in the UK, may
also be examined by the High Powered Committee so constituted.
a. A robust financial information system, on the lines of SIAFI of Brazil, needs
to be created in the government in a time bound manner. This system should
5. (Para 4.11.2) Adhoc Project Announcements
also make accessible to the public, real time data on government expenditure
a. The practice of announcing projects and schemes on an ad-hoc basis in budgets at all levels.
and on important National Days, and during visits of dignitaries functionaries
to States needs to be stopped. Projects/schemes which are considered 10. (Para 5.4.3) Capacity Building
absolutely essential may be considered in the annual plans or at the time of
mid-term appraisal. a. The capacity of individuals and institutions in government needs to be improved
in order to implement reforms in financial management. To facilitate this, a
6. (Para 4.12.6) Emphasis on Meeting Budgetary Financial Targets rather than on Outputs proper programme of training needs to be devised and implemented in a time
and Outcomes bound manner.

a. Outcome budgeting is a complex process and a number of steps are involved

11. (Para 6.3) Accrual System of Accounting
before it can be attempted with any degree of usefulness. A beginning may be
made with proper preparation and training in case of the Flagship Schemes
and certain national priorities. a. A Task Force should be set up to examine the costs and benefits of introducing

7. (Para 4.13.4) Irrational ‘Plan – Non Plan’ Distinction leads to Inefficiency in resource
Utilization

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 Strengthening Financial Management Systems Summary of Recommendations

the accrual system of accounting. This Task Force should also examine its also be devised. Capacity building needs for proper functioning of this Office
applicability in case of the Appropriation Accounts and Finance Accounts. should be identified in advance.

b. Initially, a few departments/organizations may be identified where tangible d. The modalities for ensuring non-duplication of work vis-à-vis the C&AG should
benefits could be shown to be derived within 2-3 years by implementing be formalized. This should be aimed at assisting the C&AG in concentrating
the accrual system of accounting, especially departmental ‘commercial on carrying out specialized audit/tasks.
undertakings’.
e. Standards for internal audit should be prescribed by the Office of the
c. The result of this initial implementation may be studied by a committee C&AG.
of experts which would recommend on its further implementation in all
departments/organisations at the Union/State level along with exclusions, if f. The Accounting functions should be completely separated from Internal
any. This may proceed in a phased manner. Audit.

d. Prior to its implementation, training and capacity building needs of the g. The functioning and effectiveness of this new system may be examined
accounting personnel and all stake holders in the decision making process after allowing a suitable period of operation. Based on the results of this
would have to be addressed and a meticulous schedule worked out in line with examination, such offices may also be instituted in other Ministries/
the road map of implementation. departments/organisations.

e. Before the new system is adopted, alignment of the plan, budget and accounts, h. An Audit Committee should be constituted in each Ministry/Department.
as recommended in this Report elsewhere, needs to be achieved and a viable It should consist of a Chairperson and two members to be appointed by the
financial information system needs to be put in place. Minister in charge of that Ministry/Department. The Chairperson should
be a person of eminence in public life. The two members should be from
12. (Para 7.5) Internal Audit outside the government. The Audit Committee should look after matters
related to both internal and external audit including implementation of their
a. An Office of the Chief Internal Auditor (CIA) should be established in select recommendations and report annually to the respective Departmentally related
Ministries/departments to carry out the functions related to internal audit. Its Standing Committee of Parliament.
independence, duties, functions, mechanism of coordination with the CAG
etc. should be provided by a statute. 13. (Para 7.6.5) Integrated Financial Adviser

b. CIAs should be directly responsible to the Secretary of the Department. a. The role of the Financial Adviser as the Chief Finance Officer of the Ministry
who is responsible and accountable to the Secretary of the Ministry/
c. In the initial stages, personnel may be inducted from existing accounts cadres.
Norms for recruitment and utilizing private sector expertise in select tasks may

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 Strengthening Financial Management Systems Summary of Recommendations

Department should be recognized and the trend of dual accountability should the executive and the audit, including at senior levels. These should
be done away with. include regular and meaningful meetings where important issues could be
discussed and conclusions reached on what needs to be done arising out of
b. Officers with sufficient training and experience in modern financial the recommendations made by the audit. There should also be quarterly
management systems should be posted as Financial Advisers in the Ministries/ communication from the Accountant General to Administrative Secretaries
Departments. informing them about significant points and areas of improvement noted by
Audit during their inspections.
14. (Para 8.8.7) Accountability to Parliament
16. (Para 8.10.4) Timeliness of Audit

a. In order to further strengthen the Parliamentary oversight mechanism, as many a. External audit needs to be more timely in inspecting and reporting so that
audit paras as possible need to be examined by Parliamentary Committees. their reports can be used for timely corrective action. All audits for the year
To facilitate this, the PAC and COPU may decide in the beginning of the under review should be completed by 30th of September of the following
year itself, which paras would be examined by them and which by their sub- year. To start with, all Audit Reports may be finalized by 31st December and
committees (to be constituted for the purpose). They may consider assigning this date may be gradually advanced.
other paras to the respective Departmentally related Standing Committees.
The objective would be to complete the examination of all paras within one b. IT should be used increasingly and effectively for data collection and
year. In exceptional cases, Chairman, PAC/COPU may authorize keeping a analysis.
para alive for more than one year. If still some paras are pending, it is for the
consideration of the PAC and COPU to refer these to the Departmental Audit c. Government agencies also need to be more prompt in responding to audit
Committees (recommended vide paragraph 7.5 of this Report). observations and ensure that the remedial and corrective action not only settles
the irregularities reported but also addresses the systemic deficiencies.
15. (Para 8.9.7) Relationship between Audit and the Government/Government
17. (Para 8.11.5) Inadequate Response to Audit
Agencies
a. The pending audit paras should be monitored by having a database on them
a. There is need for better understanding and synergy between the audit and in each Ministry/Department. In case of persistent default in submitting
auditees for enhanced public accountability and consequently better audit replies to the audit paras a procedure should be laid down for action against
impact. the concerned officer.

b. There should be balanced reporting by the audit. Audit reports should not
focus on criticism alone but contain a fair assessment or evaluation, which
would mean that good performance is also acknowledged.

c. There is need for increasing interaction as well as coordination between

170 171
 GOVERNMENT OF INDIA

SECOND ADMINISTRATIVE REFORMS COMMISSION

FIFTEENTH REPORT

STATE AND DISTRICT ADMINISTRATION

APRIL 2009
 State and District Administation

6.5.8.3 Recommendation:

a) In order to deploy public funds prudentially, with inbuilt financial closure, the
States should take steps to strengthen their project formulation and appraisal
capacity. CONCLUSION
6.5.9 In addition to the above, there are important policy and functional issues such as; Transfer
of Resources from the Union Government, Revenue Expenditure, Sectoral Emphasis in Plan In its previous reports the Commission has examined a whole gamut of administrative issues,
Funding, Special Area Programmes, Utilization of External Aid, issue of subsidy etc. which many of which pertain to State Governments; the Commission’s recommendations are
significantly impact the Financial Administration in the States. Since, many of these issues reiterated in this Report. The organization of the Union Government has also been examined
are being examined separately by the 13th Finance Commission, they are not being covered and the recommendations of the Commission in respect of the Union Government apply,
in this Report. mutatis mutandis, to the State Governments as well. Briefly stated, governments need to
be more compact than they are at present, need to delegate more responsibilities, powers
and resources to local bodies and need to put in place or strengthen (as the case may be)
structures of transparency and accountability.

District Administration is evolving in response to the establishment of the third tier of

governance by the 73rd and 74th Amendment to the Constitution. The Commission has
envisaged a dual role for the existing set-up. First, it will provide the Secretariat for the
proposed District Council, and be responsible to the Council. Secondly, in respect of powers
conferred on it by different statutes or those delegated by the State Government, it will be
responsible to the State Government.

Each of the Union Territories has its unique history, and a unique set of problems. The
Commission’s recommendations in respect of Union Territories have been guided by the
principle that decision making should be as close as possible to those who are affected by the
decisions. Substantial devolution and delegation of powers have been suggested.

So far as the North East is concerned the Commission’s recommendations focus on improving
and strengthening the administrative structure, processes, security set-up and personnel
management in the region. State specific suggestions have also been made. The Union and
State Governments in this region will need to work closely in this regard.

The Commission has made detailed and considered recommendations. The Commission
believes that the States will make sincere efforts to derive maximum benefits from them.
They cover a wide range of issues concerning both the Secretariat and the field formations of
the State government. When implemented, these measures would secure responsiveness in
public services and add substantially to public satisfaction.

Undertaking and implementing such wide spectrum initiatives in complex administrative

systems is a challenging task. Long term vision and commitment to change are the sine qua
non for the success of such efforts.
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 Summary of Recommendations

iv) The role of Secretaries to be redefined; to be divested of non-essential

responsibilities and executive work and larger delegation of power to
the executive departments/agencies; and

SUMMARY OF RECOMMENDATIONS v) Need for streamlining the decision making process.

3. (Para 2.3.5.5) Executive Agencies

1. (Para 2.3.2.12) Size of the Council of Ministers a) The State Governments should scrutinize the functions/activities of each
department to confirm whether these activities/ functions are critical to
a) The size of the Council of Ministers in the States needs to be reduced further the mission of the department and can only be carried out by government
considering the needs of an efficient government. For this purpose the agencies.
maximum size of the Council of Ministers may be fixed in a range between
10% to 15% of the strength of their Legislative Assemblies. In the larger b) Only those functions/ activities that have to be carried out by the government
States (where membership of the Assembly is more than 200) such maximum based on the principle enunciated in paragraph 2.3.4.6 should be carried out
percentage should be 10% where as in the medium (where the strength of the directly by the departments. Other functions/ activities should be carried out
Assembly is between 80 and 200) and the smaller States (where the strength of by Executive Agencies of the department.
the Assembly is below 80) it may be 12% and 15% respectively. This stipulation
should however be subject to appropriate proviso to remove anomalies. It c) Each Executive Agency, whether a new body or an existing departmental
may be ensured that the maximum number of Ministers permissible for the undertaking/ agency/ board/ special purpose body, etc. that is converted into
medium sized States should not exceed the number prescribed for a large sized an Executive Agency, must be semi-autonomous and professionally managed
State having 200 legislators and similarly, the maximum number of Ministers under a mandate. Such executive agencies could be structured as a department,
permissible for the smaller States should not exceed the number prescribed for board, commission, company, society, etc.
a medium sized State having 80 Legislators. There may not be any prescribed
d) There is need for a right balance between autonomy and accountability while
minimum.
designing the institutional framework of executive agencies. This could be
b) There is need to arrive at a national consensus on this issue through achieved through well designed performance agreements, Memorandum of
deliberations/discussions with the States at the Inter-State Council. Understanding (MoU), contracts, etc. However, preparing and enforcing such
performance contracts requires considerable upgradation of capacity in the
2. (Para 2.3.3.11) Rationalising the Number of Secretarial Departments concerned governmental departments.

a) The number of Secretariat Departments in the States should be further e) Agencies dealing with subjects where major functions and activities
rationalized on the following basis: have devolved on local governments would need to concentrate on monitoring
and supervision, ensuring of standards and quality, providing guidance to local
i) The existing departments covering inter-related subjects, activities and governments on technical matters, training of personnel, giving feedback to
functions should be merged; the government on implementation and performance and advising on changes
that are needed in plans and programmes – as stated in paragraph 2.3.5.4.
ii) Need for synergy between the activities of various departments;

iii) Devolution of a large number of functions to the PRIs/ULBs;

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 State and District Administation Summary of Recommendations

4. (Para 2.4.1.4) Civil Services Law Conservator of Forests should be widened to include all officers above a
specified seniority (e.g. 30 years). All officers with a seniority higher than
a) The Commission reiterates that the recommendations in its Tenth Report a prescribed limit should be eligible to be a part of the panel.
pertaining to the Civil Services Law and Civil Services Authority should be
implemented by the State Governments both in letter and spirit. c) As regards the appointment and tenure of the Director General of Police, the
recommendations made by the Commission in its Report on “Public Order”
b) In order to provide appropriate legislative backing to these reforms, each State at para 5.2.3.7 should be implemented.
Government should enact a Civil Services Law for all the personnel holding
civil posts in the State (on the lines of the proposed Union Law). However, 6. (Para 2.4.3.9) Regional Level Administration
in order to evolve a national consensus and ensure a measure of uniformity
among States, the matter may be taken up for deliberations at the Inter-State a) In view of the emergence of District as the key unit of field administration -
Council. as the third tier of government - and with rapid advancement in physical and
electronic connectivity between the State Headquarters and the Districts,
5. (Para 2.4.2.6) Appointment and Security of Tenure at the Senior Levels in the State there is no need to have an intermediate level of administration between the
Government two units of government.

a) After enactment of the State Civil Services Law on the lines of the proposed b) In order to take care of cadre management issues arising out of this step, suitable
Union enactment, the proposed State Civil Service Authority should deal with posts should be identified by respective departments, in the major districts and
matters concerning appointment and tenure of senior officers of all ranks in at the Headquarters to be manned by senior officers who are presently eligible
the State Governments (including the Chief Secretary, Principal Secretaries, to head the regional offices.
Engineer-in-Chiefs, other Agency Heads and Principal Chief Conservator of
Forests). 7. (Para 2.4.5.2) Vigilance Commssion/Vigilance Commissioner in the State

b) Till the time that such an Authority is constituted, the following mechanism a) The recommendations made by the Commission in its Fourth Report (on
may be adopted for appointment of the Chief Secretary and Principal Ethics in Governance) and its Sixth Report (on Local Governance) for action
Conservator of Forests in the States:- by State Governments should be implemented expeditiously.

• There should be a collegium to recommend a panel of names to the Chief b) The organization of the Vigilance Commission/ Commissioner in the State
Minister/Cabinet for these two posts. For the post of Chief Secretary, this should be structured on the patterns of the Central Vigilance Commission.
collegium may consist of (a) a Minister nominated by the Chief Minister, In larger States, the State Vigilance Commission should be a three Member
(b) the Leader of the Opposition in the State Legislative Assembly and (c) Body with Members who have been experts in their respective fields. In smaller
the incumbent Chief Secretary. For the selection to the post of Principal States, it may continue to be a single Member Body.
Chief Conservator of Forests the collegiums may consist of (a) The Minister
c) The laws regarding the Lokayukta would need to be amended to incorporate
In-charge of Forests, (b) the leader of Opposition in the State Legislative
the changes suggested in the Report on ‘Ethics in Governance’.
Assembly and (c) the Chief Secretary.
8. (Para 2.4.6.16) Human Resource Development, Capacity Building and Training
• There should be a fixed tenure of atleast two years for both these posts.

• The selection for the post of Chief Secretary and Principal Chief

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 State and District Administation Summary of Recommendations

a) The Commission reiterates its recommendations pertaining to capacity Commission, through discussions/deliberations at the Inter-State Council.
building and training made in the Report on “Refurbishing of Personnel
Administration” (Tenth Report). 10. (Para 2.5.9.4) Functions of the Public Service Commission; its Relationship with the
Junior Recruiting Bodies
b) Every State should formulate a comprehensive Human Resource Development
Policy with training as an important component on the lines of the National a) The Public Service Commission should handle only (i) recruitment of
Training Policy, 1996. Simultaneously, a suitable monitoring mechanism to candidates for higher level posts under the State Government (Class I and Class
supervise the implementation of such policy may also be setup. II positions of various State cadres), (ii) advising government on senior level
promotions through the DPC and (iii) recruitment and promotions to teaching
c) In addition to the apex level training body called the Administrative Training posts in government Colleges and fully funded units of the Universities.
Institute (ATI), adequate numbers of Regional Training Institutes should
also be established at different places across the State. The Apex Institute b) With regard to the appointment of junior level functionaries of the State
should take care of the training needs of the Class I/Class II officers of the Government, the role of the State Public Service Commission should be to
State services, whereas the Regional Training Institutes should deal with the lay down broad norms and standards. The recruiting organisations concerned
mid-career training needs of Class II officers and induction training of Class such as the Subordinate Service Commission, the School Teachers Selection
III employees. Steps should also be taken to set-up district level training Commission and District Recruitment Boards should follow these norms and
organizations which could take care of the mid-career training needs of Class standards in their working. The State Public Service Commission would act
III employees. The district centre should also have proper facilities for skill/ as a watch dog.
behavioral training of Class IV recruits.
11. (Para 3.2.4.15) Redefining the Collector’s Role
d) In this arrangement, the apex body, the ATI should have an overall integrative
a) There is need to realign the functions of the Deputy Commissioners/ District
and coordinating role for the entire training/orientation programme running
Collector so that he concentrates on the core functions such as land and revenue
in the State. It should act as the primary resource centre for Regional and
Administration, maintenance of law and order, disaster management, public
District Training Institutes. It should also provide training to those who
distribution and civil supplies, excise, elections, transport, census, protocol,
will work on their faculty. In course of time, the ATI can undertake projects
general administration, treasury management and Coordination with various
of distance learning and become a virtual academy of training for the entire
agencies/ departments.
State.
b) The Commission reiterates its recommendations regarding the Land Title
e) The State Administrative Training Institutes (ATIs) should have embedded
Management System made in its eleventh Report on e-Governance. It should
in them, Centers of Good Governance.
be one of the primary duties of the District Collector to perform the task
9. (Para 2.5.8) State Public Service Commissions envisaged in the aforesaid recommendations.

a) Steps should be taken to ensure that persons of high standing, intellectual c) There is need to strengthen the compliance machinery at the district level
ability and reputation are selected as Chairman/Members of the State Public to enforce provisions of the RTI Act and to reduce the element of delay and
Service Commissions. A limit should also be imposed on the strength of its subjectivity in the functioning of the lower level formations of the government.
membership. This should be done by creating a special RTI Cell in the office of the Collector,
whose functions should be reviewed by the Collector at regular periodicity.
b) There is need to evolve national consensus among States on the issues of (i)
appointment of Chairman/Members and (ii) limit on the membership of the d) Officers may be posted as District Magistrates early in their career, but in

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complex and problem-prone districts an IAS officer should be posted as DM c) Innovations and best practices initiated by officers should be documented
only on completion of 10-12 years of service. adequately and institutionalized through changes in rules/laws wherever
required.
e) Steps should be taken to ensure that the Collector plays an effective
coordination role in activities and programmes of other departments at the 13. (Para 3.3.1.14) District Administration; Functional and Structural Reforms
district level.
a) There should be an integrated governing structure at the district level in the
12. (Para 3.2.4.16.5) Modernising the Office of the District Collector form of the “District Council” with representation from both urban and rural
areas. The Council will act as the “District Government”.
a) The Commission reiterates its recommendations on the issues of personnel
management, performance and outcome evaluation, effective citizen centric b) The District Collector should have a dual role in this government structure.
administration, use of information technology, process re-engineering etc. He should work as the Chief Officer of the District Council and should be
made in its earlier Reports on “Refurbishing of Personnel Administration”, fully accountable to the District Council on all local matters.
“Ethics in Governance”, “Citizen Centric Administration”, “Public Order”,
“Disaster Management”, “Conflict Resolution” and “e-Governance”. These c) The District Officer would also be fully accountable to the State Government
recommendations should be expeditiously implemented where applicable to on all regulatory/other matters not delegated to the District Government.
the district administration.
14. (Para 3.3.2.6) Line Departments of the State Government at the District/Sub-District
b) The following steps should be taken to modernize the office of the District Level
Collector:-
a) District/sub-district offices, whose activities/functions coincide with the
• Management Information System (MIS) should be set-up in the office of activities and functions transferred by the State Government to the PRIs/
the Collector for effective monitoring and evaluation of programmes/ ULBs need not exist as separate entities at the district and sub-district levels.
projects under his direct control. Functions funds and functionaries of such offices should be transferred to the
appropriate local government institutions.
• A computerized District Grievance Cell should also be set up in the
Collectorate. b) Line departments such as the Departments of Water Resources and PWD
(Roads) or the Department of Health engaged in execution of State-wide
• An exclusive Vigilance Cell should be set up at the district level under projects need to maintain their separate offices at the district/sub-district level.
overall supervision of the District Collector. This Cell should also maintain On important issues, they will need to coordinate with the District Collector.
appropriate liaison with the office of the State Vigilance Commission/ They will also need to coordinate with the District Council to the extent their
Commissioner. activities impinge on the powers and functions of the Council.

• A forum should be established at the district level to interact with civil c) The line departments and their Agency Heads should provide technical
society groups and media on important public issues. support and guidance to the District Councils in planning and monitoring
implementation.
• Immediate steps should be taken to introduce process re-engineering and
increased use of information technology. The steps suggested at paragraph 15. (Para 4.2.6.16) Role of the Government of NCT in Municipal Affairs - its Relationship
3.2.4.16.3.4 in this regard may be initiated on priority. with the Municipal Corporation of Delhi (MCD)

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a) The Municipal Corporation of Delhi (MCD), including appointment of (b) In order to provide efficient, responsive and citizen friendly services to the
the Commissioner and other functionaries should lie in the domain of the citizens, the MCD should be converted into a three tier institution with the
Government of the National Capital Territory (GNCT). This can be done Corporation at the apex. The middle tier i.e. the Zones should be adequately
by way of a notification under Section 490A of the Act, issued by the Union strengthened and empowered. The zonal body called Janpad Parishad/
Government. However, the appointment of the Commissioner should be made Zonal Council will primarily be a representative body consisting of elected
by the GNCT in consultation with the Union Government. Councillors (whose constituency falls majorly within the area of the Zone) and
some nominated members. These Janpad Parishads/Zonal Councils should
b) In order that, the Union Government retains its overarching role over delivery be given considerable financial and administrative autonomy. Each Zone
of municipal services in the National Capital Territory, some provisions of the should have a separate fund and all the taxes under Sections 113(1) and (2) of
existing Act should remain unchanged. For example, Sections 487 to 490 of the DMC Act should be collected and retained by them. Their powers with
Chapter XXIV will need to be retained in their present form. Provisions dealing regard to enforcement of regulations and bye-laws should also be enhanced
with building regulations should be kept intact in the domain of the Union appropriately. The third tier will consist of Ward Sabhas.
Government (for example Section 347). Section 503(dealing with exemptions
to the diplomatic missions) and Section 508 (dealing with special provisions (c) The MCD should be at the apex level of the new structure. It will act as a kind
for the Red Fort area) should also vest with the Union Government. of an Umbrella Organization – a Holding Entity, responsible for giving overall
policy directions and high level conceptual technical and HRD support to the
c) The Union Government may appoint an Expert Committee which could work zones. This Apex body should not delve into the day-to-day functioning of the
out the details of the required legal changes in a time bound manner. Zones. It should provide coordination among Zones & make laws/bye-laws for
the whole of Delhi. It should take up projects which run across multiple zones.
16. (Para 4.2.6.17.7) Empowerment of the Mayor
It will be the duty of this apex body to ensure that standards of development
a) The Mayor of the MCD should be directly elected by popular mandate through and civic amenities remain uniform throughout the city.
a city-wide election. The term should be for five years.
(d) Substantial changes will need to be introduced in the provisions of the existing
b) The functions of chairing the Corporation and exercising executive authority DMC Act, 1957 to implement these recommendations. The Expert Committee
should vest in the same functionary i.e. the Mayor. The Mayor should be the suggested earlier at paragraph 4.2.6.16(c) may be asked to carry out this task
Chief Executive Authority of the MCD. within a period of two months.

c) The Mayor should appoint a ‘Cabinet’; choosing the members from amongst 18. (Para 4.2.7.5) Distinction between Urban and Rural Areas in the NCT
the elected corporators. The strength of this body should not exceed 10 per
a) There is no need to maintain the artificial distinction between urban and rural
cent of the number of the elected Corporators or fifteen, whichever is higher.
areas in the National Capital Territory. The entire geographical area falling into
The “Cabinet” should exercise executive authority on matters entrusted to it
the NCT should be declared as “urban” under the meaning of Section 2(61)
by the Mayor, under his/her overall control and direction.
of the DMC Act.
17. (Para 4.2.6.18.12) Issue of Splitting up the MCD
b) The Municipal Corporation should realise the taxes, levies and other charges
(a) The municipal services in the entire National Capital Territory (NCT) may be accordingly from the residents of these areas.
under the jurisdiction of a single municipal body viz. the current Municipal
19. (Para 4.2.8.5) New Delhi Municipal Council
Corporation of Delhi (MCD).
a) There is no need to change the present governing structure of the New Delhi
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Municipal Council. body in charge of preparing the Master Plan for the NCR Region consisting
of both regional and sub-regional Plans. It should have adequate financial
20. (Para 4.2.10.15) Role of the Government of NCT in Spatial Planning and Land resources at its disposal so that it could selectively provide financial assistance
Development; Its Relationship with the Delhi Development Authority to a few schemes of importance.
a) The composition of the DDA needs to be changed. The Chief Minister of b) The composition of the 21 member NCR Planning Board should be modified
Delhi should be the Chairperson of this body in place of the Lt. Governor. and only 6 Union Ministers and 3 Chief Ministers (Uttar Pradesh, Haryana
This should be done by amending Section 3(3) (a) of the DDA Act, 1957. and Rajasthan) may be members of the Board.
b) As stated in paragraph 4.2.10.12, other powers of the Union Government as c) There should be an Executive Committee under the chairmanship of Secretary
mentioned in various sections of the DDA Act should remain. in-charge of Urban Development in Government of India with Secretaries
incharge of Commerce and Industry, Industrial Policy and Promotion,
c) Steps should be taken urgently to improve the internal functioning of the DDA
Expenditure, Power, Secretary, Road Transport and Highways, Chairman,
on the lines recommended by the Ashok Pradhan Committee.
Railway Board (all from the Government of India), Chief Secretaries of the
21. (Para 4.2.11.8) Role of the Government of NCT - In Police, Law and Order Governments of Uttar Pradesh, Rajasthan, Haryana, Principal Advisor (HUD),
Planning Commission, and Vice Chairman, Delhi Development Authority as
a) The Union Government may retain control over the broader aspects of security members.
and law and order whereas traffic, local policing and enforcement of the special
laws could be handed over to the Delhi Government. In the long run some of d) Since the Chief Ministers of the three States are members of the Board, the
these functions could be transferred to the Municipal Corporation. decisions that are agreed to should be binding on the States concerned. The
NCR approved regional plans/sub-plans should mandatorily be part of the
b) As this will involve major restructuring of the present Delhi Police establishment, Plans of State Governments. The NCR Planning Board Act should be amended
it may be advisable to constitute a Task Force with representatives of both the accordingly.
Union and the Delhi Government to study the matter in depth and suggest
appropriate restructuring through legislative and administrative measures. 24. (Para 4.3.7) Chandigarh

22. (Para 4.2.12.6) The Government of the NCT - Power to Raise Public Debt a) There is urgent need to revisit the Capital of Punjab (Development and
Regulation) Act and the Punjab New Capital (Periphery Control) Act, 1952
a) The Government of the NCT needs to have access to greater funding; and examine if and how they are to be aligned with the changed circumstances.
beyond its own revenues or the grants given to it by the Union Government. This issue should to be examined urgently by the Ministry of Home Affairs
It should be allowed to have recourse to market borrowings. This could be and the UT Administration.
done by introducing an amendment to Article 293 by replacing the word
“State” with the words “State and UTs having a Legislature”. Such borrowings b) The Metropolitan Planning Committee should be constituted without
would be subject to limitations imposed by Article 293(3) and 293 (4) of the further delay for comprehensive planning of the entire area covered under the
Constitution. jurisdiction of the Union Territory of Chandigarh.

23. (Para 4.2.13.9) National Capital Region Planning Board c) The entire territory under the jurisdiction of the Union Territory of Chandigarh
should be declared as urban area. However, in order to protect the interest
a) The NCR Planning Board should remain a planning, monitoring and advisory of present villages in the process of development, Ward/Area Sabhas should
be constituted as recommended by the Commission in its Report on Local
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Governance. Also, till such time that the infrastructure in these villages comes Municipal Concil and senior representatives from the Ministries of Home
at par with the urban areas of Chandigarh, they may be given necessary (local) Affairs, Tribal Affairs, Environment, Forests and Defence and the Planning
tax relief. Commission to advise him on all important matters of administration.

d) The present Advisory Council to the Administrator should be substituted by b) The Home Minister’s Advisory Committee may be replaced by a Committee
a more compact and cohesive body comprising inter-alia of the Member of under the Chairmanship of the Home Secretary with officers of suitable
Parliament from Chandigarh, one MP each from Punjab and Haryana, the seniority from the Ministries of Environment and Forests, Tribal Affairs,
Mayor of Chandigarh and the Advisor to the Administrator. Such a compact Finance, Defence, Shipping and Planning Commission to examine and give
body would be able to provide the necessary inputs to the Administrator and prima facie administrative approval to important proposals concerning this
also be able to meet more frequently. Territory.

e) The Union Government should suitably enhance the financial powers of the c) The IDA may be replaced by a multi-disciplinary task force under the
UT administration by notifying the delegation proposed in the Table 4.12. Chairmanship of the Deputy Chairman, Planning Commission. This body
Within such delegated powers, the UT Administration must be given full should be responsible for laying down guidelines for preparing medium and
administrative and functional autonomy. In addition, the UT of Chandigarh long term perspective plans for the overall development of the islands and
should also have powers to create certain categories of posts such as teachers, monitoring its implementations.
doctors and para-medical staff which are necessary for delivering vital services
used by the people of the region. d) Recommendations made by the Commission in its Report on Local Governance
(Sixth Report) should be examined and implemented to the extent they are
25. (Para 4.4.9) Puducherry relevant to strengthening and empowering local government institutions in
the Andaman & Nicobar Islands.
a) There should be enhanced financial and administrative delegation of powers
to the Government of Puducherry. The Council of Ministers should be free e) The Union Government should enhance financial the powers of the UT
to discharge its functions effectively within such delegation. administration by notifying delegation proposed in the Table No. 4.14. This
should be revised once in five years. Within such delegated powers, the UT
b) The delegation of powers should be made as suggested in Table No. 4.13 and Administration must be given full administrative and functional autonomy.
revised once in five years.
27. (Para 4.6.5) Lakshadweep
c) Recommendations made by the Commission in its Report on “Local
Governance” (6th Report) may be implemented on priority in order to a) The Union Government should constitute an Advisory Council to the
strengthen and empower the PRIs in Puducherry. Administrator of Lakshadweep consisting of the local Member of Parliament,
Chairman of the Zila Parishad and representatives of the Ministries of Home
d) The Puducherry Administration should be given the powers to raise public Affairs, Tribal Affairs, Environment and Forests and Defence and the Planning
debt in order to finance its development projects and plans. Commission to advise him on all important matters of administration.
26. (Para 4.5.7) Andaman and Nicobar Islands b) The Home Minister’s Advisory Committee as existing today may be replaced
by a Committee under the Chairmanship of the Home Secretary with officers
a) The Union Government should constitute an Advisory Council to the
of suitable seniority from the Ministries of Environment and Forests, Tribal
Administrator of Andaman & Nicobar Islands consisting of the local Member
Affairs, Finance, Defence, Shipping and Planning Commission to examine and
of Parliament, the Chief Secretary, Chairpersons of the Zila Parishad and
give prima facie approval to important proposals concerning this territory.
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c) The multi-disciplinary task force under the Chairmanship of the Deputy a) In order to address the genuine and legitimate concerns of the local people,
Chairman, Planning Commission, recommended to be set up for the Andaman there is need to continue political dialogue among various stakeholders. Steps
& Nicobar Islands in place of the Island Development Authority should also should be taken to upgrade the capacity and capability of the police forces
include the Lakshadweep Islands. This Committee would be responsible for of the States so that they are able to uphold the law. In order to control cross
laying down guidelines for preparing medium and long term perspective border movement of insurgents, in addition to other measures, diplomatic
plans for the over all development of the Islands and for monitoring its efforts should be stepped up.
implementation.
b) The North-East Division of the Ministry of Home Affairs should be upgraded
d) Recommendations made by the Commission in its Report on Local Governance to a separate wing and put under the charge of an Additional/Special Secretary
(Sixth Report) should be examined and implemented to the extent they are to handle the increased and complex workload pertaining to the region.
relevant to strengthening and empowering local government institutions in
Lakshadweep Islands. c) To oversee the formulation and implementation of the plans for this region,
a Standing Committee of the National Development Council should be
e) The Union Government should enhance the financial powers of the UT constituted and may be headed by a Cabinet Minister. The Committee should
administration by notifying the delegation proposed in the Table No. 4.15. report to the Chairman, NDC twice a year to ensure both speedy resolution
This could be reviewed once in five years. Within such delegated powers, of any differences and coordinated action regarding development of the
the UT Administration should be given full administrative and functional region.
autonomy.
30. (Para 5.4.8) Provisions of the Sixth Schedule of Constitutions with Respect to Assam,
28. (Para 4.7.6) Daman and Diu and Dadra & Nagar Haveli Meghalaya, Tripura and Mizoram

a) The recommendations made by the Commission in its Report on ‘Local a) The Government may undertake an exercise to incorporate provisions which
Governance’ should be implemented on priority by the Union Government currently occur as footnotes, in the main text of the Sixth Schedule. This will
in Daman & Diu and Dadra & Nagar Haveli. make the Schedule more accessible to members of the public.

b) The Union Government should immediately enhance financial powers of the 31. (Para 5.5.5) Adhoc Transfer of Subjects/Activities to Autonomous Councils
UT administration by notifying delegation proposed at Table No. 4.16. This
should be revised once in five years. Within such delegated powers, the UT a) The power of the Councils to make laws, as permitted by the Schedule, should
Administration must be given full administrative and functional autonomy. be respected in its true spirit and draft legislations should not be stalled at
the State level for years, while ensuring that they are not inconsistent with the
c) The Union Government should review the requirement of personnel at provisions of the Constitution and relevant Union and State Laws.
different levels in both the UTs. The operating levels should be adequately
manned. At the same time, the Government should examine the issue of having b) The States should undertake comprehensive activity mapping with regard to
so many senior level posts in Daman & Diu, which has resulted in a top-heavy all the subjects mentioned in Para 3, 3A and 3B of the Sixth Schedule. This
administration. mapping should cover all aspects of the subjects viz planning, budgeting and
provisioning of finances. This will necessitate full transfer of all government
29. (Para 5.3.6) North Eastern Region: Ethnic Conflicts - in Places, Manifesting as offices and institutions dealing with these activities to the control of the
Territorial Conflicts and Violence (Problem of Insurgency and Law and Order) Councils. The State Government should set-up a Task Force to complete this
work in a time span of one year.

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c) The Union Government should also take similar action with regard to Centrally envisaged therein. A periodicity may also be provided for the Commission.
Sponsored Schemes being implemented in these areas.
c) A high-level Review Committee headed by the Governor and consisting
32. (Para 5.6.6) Predominance of non-elected Customary Heads/Bodies at the Village of representatives of both the State Government and the District Councils
Level; Issue of Village Self Governance in the Sixth Schedule Areas should be formed in each State to review the functioning of these bodies. This
Committee should submit its report to the Union Government.
a) Autonomous Councils should be encouraged to pass suitable legislation for
establishment of elected bodies at the village level with well defined powers 35. (Para 5.11.5) Issue of Tribal Areas Lying outside the Sixth Schedule
and a transparent system of allocation of resources.
a) For tribal areas which lie outside the Sixth Schedule as well as the Seventy Third
b) Suitable stipulations may be made in the procedure for release of grants to the Constitutional Amendment the State Government should take steps to create
Councils that a certain portion thereof will be disbursed only in the event of specially at the district level bodies which should consist of both elected as
a Council passing and implementing the legislation referred at (a) above. well as traditionally selected representatives. The States which show initiative
and take a lead in this matter should be given incentives.
c) While an Autonomous District Council should be free to lay down a suitable
framework for Village Councils under its jurisdiction, this freedom should b) The District Rural Development Authority of the district should work as a
be subject to certain general principles such as, the number of ex officio body accountable to this District Level Body.
members/ traditional village functionaries should not be in a majority and
36. (Para 5.12.6) Personnel Management and Capacity Building of Administration
the Village Council should be responsible for implementation of development
schemes at the village level (including planning, monitoring and selection of a) The North Eastern Council, in consultation with the Universities and other
beneficiaries). educational institutions of the region, should draw up programmes for
coaching students for the Civil Services, and other competitive tests such as
33. (Para 5.7.3) Absence of Linkage between the Sixth Schedule and the 73rd
the Combined Defence Services Examination and the Engineering/Medical
Amendment
Examinations.
a) Autonomous Districts/Councils in Sixth Schedule Areas should also be covered 37. (Para 5.13.2) Issues of Recruitment in the Sixth Schedule Areas
by the State Finance Commission and the State Election Commission.
a) Immediate steps should be taken to constitute District cadres for all Groups ‘C’
34. (Para 5.8.6) Special Powers of the Governors of Assam, Meghalaya, Tripura and and ‘D’ posts (Classes III and IV) for performance of all ‘transferred functions’
Mizoram with respect to Schedule 6 Areas wherever such action has not been taken.
a) The Governors of Assam, Tripura and Mizoram should be empowered to b) Recruitment to Groups ‘A’ and ‘B’ posts (Classes I and II) by the Autonomous
exercise discretionary powers in respect of all the provisions pertaining to District Councils or analogous bodies particularly to positions requiring
the Autonomous Councils under the Sixth Schedule in consultation with the technical/professional qualifications should ordinarily be left to the State
Council of Ministers and if necessary, in consultation with these Councils. A level.
Constitutional amendment will be required for this purpose.
c) State Governments and the Autonomous District Councils should jointly
b) Paragraph 14 of the Sixth Schedule should be suitably amended to enable the draw up norms for arriving at the number of technical and professional posts
Union Government to appoint a common Commission to review the working required in the tribal areas. Personnel for such posts should be made available
of all autonomous districts of the North-East and to make recommendations as on priority basis.

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d) Postings to the tribal areas should be for a fixed tenure and must be followed 39. (Para 5.15.1.5) Assam
by, as far as practicable, to a posting at a place of the officer’s choice.
a) All the three Sixth Schedule Autonomous Councils of Assam should be given
e) On satisfactory completion of tenure in such areas the incumbent should parity with regard to legislative and executive powers.
be entitled to benefits like deputation for higher professional qualifications,
training abroad and higher weightage in Departmental promotions. b) Adequate resources should be provided to the Autonomous Councils so
that they are able to carry out their assigned responsibilities effectively. The
38. (Para 5.14.4) Regional Institutes allocation of funds to these bodies should be based on pre-settled norms (with
reference to the minimum standards of service to be provided and their capacity
a) For improving delivery systems and development processes, emphasis ought to
to raise local resources). This exercise could be undertaken by the State Finance
be given to capacity building of personnel and it should be a priority activity
Commission.
of the government.
c) The system of release of funds to the BTC through a single window system
b) There should be comprehensive training programmes for all government
should be further fine tuned to make it more effective and hassle free. Such a
employees working in the North-Eastern States. The programmes should
hassle free system of fund release should be adopted for the other two Councils
consist of (i) a long duration induction module when he joins service, (ii) mid
also with adequate delegation of financial powers.
career training opportunities and (iii) officials should be encouraged to acquire
higher professional qualifications/skill sets in their respective branches and 40. (Para 5.15.1.6.8) Tribe Specific Councils (Created under State Enactment) in Assam
also in subjects such as Public Administration, Trade laws, project investment/
appraisal/ management and information technology applications. a) The Government of Assam should apportion functions between the tribe
specific Councils/Village Councils and the Panchayati Raj Institutions in a
c) The North Eastern Council (NEC) should establish an apex Regional Academy manner that schemes involving individual tribal beneficiaries may be assigned
for Human Resource Development as an autonomous body with academic and to the ‘Tribe Specific Councils’ while area development schemes are assigned
executive flexibility. The mandate of the Academy may extend to the entire to the latter.
range of services under the government.
b) The State Government should initiate a system of meeting at least the
d) The North-Eastern Council should be given the responsibility to undertake a establishment costs of the ‘Tribe Specific Councils’ from sources outside the
review of various regional institutes under the Union Government/Ministries tribal sub plan and build in these requirements in their projections to the next
and come up with suitable recommendations for bringing improvements in Finance Commission.
their functioning whenever required. An officer/member of the NEC should
be placed on the governing body of these institutions. c) The State Government should take steps to identify innovative initiatives
which could be entrusted to the Tribe Specific Councils for the benefit of the
e) The NEC should take up monitoring and evaluation of these Institutes. The concerned tribes without affecting area development and local government
Commission in its Seventh Report has already recommended that the NEC concerns.
should be suitably strengthened. Once this is done, it should be possible for
the NEC to undertake these additional and important responsibilities. d) Suitable guidelines may be drafted for preparation of District and sub-District
plans in the relevant areas through joint efforts of the Tribe Specific Councils
f) The North Eastern Hill University (NEHU) could provide the academic and the Panchayati Raj Institutions.
foundation for policy research on issues impinging on the entire region and
which need to be addressed by State action. 41. (Para 5.15.2.5.5) Arunachal Pradesh

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a) The recommendations made in its Report on “Local Governance” for a) Initiatives of the Manipur Government in human resource management need
strengthening and empowering PRIs need to be implemented on priority. to be sustained. Similar initiatives may also be considered by other States of
the region.
b) Some districts of Arunachal Pradesh are presently affected by insurgency from
neighboring States. Firm steps should be taken by both the Union and the 44. (Para 5.15.3.9.3) Special Powers to the Governor of Manipur under Article 371
State Government to restore peace in the affected areas.
a) In view of the circumstances prevailing in Manipur, the Governor of Manipur
c) Traditionally, land in Arunachal Pradesh is owned by the community. However, should be given special powers/responsibility with respect to law and order
this system has gradually weakened primarily because community owned land on the lines of the powers vested in the Governors of Nagaland and Arunachal
is not a bankable collateral. This issue needs to be resolved in consultation Pradesh under Articles 371A and 371H of the Constitution respectively. This
with the Reserve Bank of India, banks and stake-holders in the land. could be done by inserting a suitable paragraph in Article 371C.

d) Because of the gradual expansion of the formal judicial system in place of the 45. (Para 5.15.4.7) Meghalaya
traditional ‘Kebang system’, it would be necessary for the Ministry of Home
Affairs to examine the Assam Frontier (Administration of Justice) Regulation a) The fact of Autonomous District Councils should be accepted and the State
Act 1945 in the State, to ensure a smooth transition to the formal judicial should undertake comprehensive activity mapping with regard to all the
system. matters mentioned in para 3 of the Sixth Schedule. This process should cover
all aspects of the subjects viz planning, budgeting and provisioning of finances.
42. (Para 5.15.3.7) Manipur This will necessitate full transfer of local functionaries of the field offices/
departments and bodies relating to these activities at the district level to the
a) Sincere, proactive measures should be taken to revive and activate the Hill control of the Councils. The State Government should set-up a task force to
District Councils in Manipur. It will be imperative to devolve a major complete this work in a time bound manner.
domain of developmental activities to them. It will have to be done along
with transfer of funds and functionaries. The local functionaries of the field b) Allocation of funds to the District Councils should be based on normative and
offices/departments of the State Governments and the parallel bodies which transparent considerations. These allocations should be budgeted in detail and
are currently handing these activities at the district level will also need to be released in agreed instalments during the financial year.
placed at the disposal of the District Councils.
c) The Union Government would also need to take similar action with regard to
b) All steps should be taken to put in place elected Village Councils in rural Centrally Sponsored Schemes being implemented in these areas.
areas. Suitable incentives should be provided to the State for initiating
proactive legislative measures in this direction having due regard to the local d) Appropriate measures may be taken for capacity building in Autonomous
circumstances. Councils so that they are able to utilize the funds in a better way.

c) As regards the PRIs the Commission has already made a number of e) Government of Meghalaya may take steps for extension of the experiment of
recommendations for their strengthening and empowerment in its Report elected village committees in the Garo Hills for implementing the National
on “Local Governance” (sixth Report) which needs to be implemented on Employment Guarantee Act and for implementation of other rural development
priority. programmes as well.

43. (Para 5.15.3.8.5) Issues of Personnel Management in Manipur f) In the long run, directly elected village level representative bodies will need to
be constituted and adequately empowered in autonomous Hill Councils areas

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of Meghalaya. Tripura comprise of both TTADC and part IX areas. The TTADC should
also be involved in the planning process at the State level.
46. (Para 5.15.5.5) Mizoram
b) Immediate steps should be taken to ensure that there is only one intermediate
a) The State should undertake comprehensive activity mapping with regard to structure between the village and the district bodies of the TTAADC.
all the matters mentioned in para 3 of the Sixth Schedule. This process should
cover all aspects of the subjects viz planning, budgeting and provisioning of c) The State Government should take steps to evolve a mechanism which could
finances. This will necessitate full transfer of functionaries of the field offices/ coordinate block level committees chaired by MLAs and zones and sub-zones
departments/bodies relating to these activities to the control of the Councils. which are headed by elected representatives of TTAADC.
The State Government should set-up a Task Force to complete this work in a
time bound manner. d) The State may also undertake comprehensive activity mapping exercise to
delineate functions among various levels operating within the system such as
b) The Union Government will also need to take similar action with regard to the District Council, the Block committee and the Village Council.
Centrally Sponsored Schemes being implemented in these areas.
50. (Para 6.5.1.3) Financial Delegation and Operational Flexibility – the IFA system
47. (Para 5.15.6.9) Nagaland
a) Based on the experience of the Union Government with regard to the IFA,
a) The Commission would like to reiterate the following recommendation in this States should take steps to introduce / strengthen the IFA system in the State
regard made in its Seventh Report:- administration.

Nagaland has made commendable efforts to usher in a paradigm of decentralised 51. (Para 6.5.2.3) Avoiding Fiscal Profligacy
village self-governance through effective use of “Social Capital”. The State has
communitised a large number of service delivery schemes. The Ministry of Rural a) The State Governments need to take steps to ensure that projects and
Development should formally recognise this arrangement for implementation of programmes are included in the budget only after well considered deliberations
various development and poverty alleviation initiatives in this State. and processes. The practice of announcing projects and schemes on an ad-hoc
basis needs to be done away with.
Its replication by other States should be pursued.
52. (Para 6.5.3.3) Expenditure Management
48. (Para 5.15.7.6) Sikkim
(a) The States should take priority steps to improve their expenditure profile by
a) The Commission has made a number of recommendations for strengthening (a) finalizing the detailed project reports of schemes in the preceding year and
and empowering PRIs in its Report on “Local Governance” which needs to (b) ensuring that the financial sanctions are given to the departments in the
be implemented on priority. first two months of the current financial year.

b) There is need to rationalize the large cadre strength of various All India Services (b) The States should conduct a zero-base review of programmes and schemes
in the State, in accordance with actual requirements. which are more than five years old and which involve large sums of public
money. (Say over 50 crores)
49. (Para 5.15.8.8) Tripura
53. (Para 6.5.4.7) Prudent Budget formulation
a) DPCs may be constituted in all the districts of Tripura with representation
from both the TTADC and the District Administration as all the districts in

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a) There should be prudent and realistic economic assumptions in formulation to the prescribed time limits.
of budget estimates. At the end of every financial year, the gap between the
estimates and the actuals should be analysed so that the underlying economic 57. (Para 6.5.8.3) Projectisation and Appraisal
assumptions could be suitably calibrated for the future.
a) In order to deploy public funds prudentially, with inbuilt financial closure, the
b) There should be interaction between the State Government and stakeholders States should take steps to strengthen their project formulation and appraisal
including industry associations, think tanks etc. in budget formulation. In capacity.
order to make such consultations effective and meaningful, steps should be
taken to (a) provide information-access to citizens and (b) educate citizens
and leaders of society on budget making and its implications.

c) State Governments should shift to multi-year budgeting and give the estimates
of revenue and expenditure for a period of four years in addition to the year
which the budget pertains. This should be done on a roll-on basis.

d) The States should follow the practice of preparation and implementation of

the MTFP.

e) In order to remove prejudice against non-plan expenditure, the State should

take steps to provide for maintenance of the asset in the project cost itself and
ensure its maintenance for at least five years after it is acquired. This action
should go hand in hand with recovery of adequate user charges.

54. (Para 6.5.5.2) Revenue Forecast and Need for a Tax Research Unit

a) The State Governments should initiate steps to set up dedicated cell within its
Finance Department to provide input on the revenue forecast with the reasons
thereof.

55. (Para 6.5.6.2) Mechanism for Internal Control

a) The State Governments should take steps to set up internal audit committees
in each of its departments.

56. (Para 6.5.7.3) External Audit

a) The State Governments should specify a time frame for the Departments for
necessary follow up action on the recommendations of Audit and forwarding
of the ATN after incorporating such action to Audit for vetting before their
final submission to the State PAC/ COPU. All Departments should adhere

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